Banking with EQ Bank, one of the best online banks in Canada, keeps getting better with the launch of registered accounts: Tax-free Savings Account (TFSA) and Retirement Savings Plan (RSP).
Before now, EQ Bank only offered a savings account, GIC and joint accounts. Customer that want to save using either of the registered accounts would have to look elsewhere to earn income on their money on a tax-free or tax-deferred basis.
With the addition of the new savings products and registered GICs, EQ Bank has expanded its offering and is now more attractive to Canadians that prefer to keep most of their accounts in one place.
In this review of the new EQ Bank TFSA and EQ Bank RSP, you’ll learn about:
- the key features of the accounts;
- how to open the accounts; and
- how they compare to the existing accounts from its competitors.
You should know that Registered Retirement Savings Account (RRSP) is an example of RSP. So EQ Bank RRSP and EQ Bank RSP may be used interchangeably in this post.
About EQ Bank
EQ Bank is an online-only bank that provides Canadians with simple and convenient ways to save and manage their money. It was launched in 2016 and a trademark of Equitable Bank, one of the largest Schedule I banks in Canada.
With the competitive interest rate on its Savings Plus account (currently2.50%*), EQ Bank has one of the highest savings account rates in the country and an account with zero everyday fees.
Related Post: EQ Bank Review: Best Savings Account in Canada
EQ Bank TFSA Savings Account
The EQ Bank TFSA is a Canadian dollar denominated account that lets you save and earn more on your money completely tax-free.
It is a perfect way to save for your short to medium term goals without the fear of a drop in the value of your investment due to volatility. Or add some fixed income to your long-term portfolio.
Some of the key features of the account include:
- Competitive interest rate of 3.00%
- Zero everyday banking fees
- Zero fees for contributions and withdrawals
- Free balance transfer to other financial institutions
- Maximum balance per customer of $200,000
- Easy online sign-up process
- Setup recurring transfers easily and completely free
Who can open a TFSA at EQ Bank
You can open the EQ Bank TFSA if you’re an:
- EQ Bank customer,
- reached the age of majority in your province; and
- have a valid Social Insurance Number (SIN).
Unfortunately, Quebec residents, non-Canadian residents or those with temporary SINs can not open the account.
Fees
Like the Savings Plus Account , the EQ Bank TFSA has zero transaction fees and no monthly maintenance charges.
Related Post: Best TFSA Savings Account Rates
EQ Bank RSP Savings Account
The EQ Bank RSP is a zero fees account that can be used for retirement savings and investment. You can open either the RSP Savings account, RSP GIC or both.
A few of the features of the account include:
- Competitive interest rate of 3.00%
- Zero everyday banking fees
- Zero fees for contributions and withdrawals
- Free balance transfer to other financial institutions
- Maximum balance per customer of $1,000,000
- Link up to 10 external accounts
Who can open an RSP Account at EQ Bank
Any EQ Bank customer that has a valid SIN and attained the age of majority in their province can open an RSP Account.
More importantly, you should confirm that you have not maxed out your RRSP contribution room to avoid the CRA 1% penalty for RRSP over-contribution.
Quebec residents, non-Canadian residents, those with temporary SINs or customers turning 71 in the year of application are not eligible to open the account.
EQ Bank TFSA and RSP GIC
If you want to lock in the current attractive rates on your money, you should consider investing in one of the GIC terms.
But you need to open the Savings Account variants before you can invest in the GICs.
The various EQ Bank TFSA and RSP GIC terms and the current interest rates are shown below:
| GIC Term | Rate (%) |
|---|---|
| 3 Month | 3.10% |
| 6 Month | 3.60% |
| 9 Month | 3.75% |
| 1-year | 4.75% |
| 2-year | 4.35% |
| 3-year | 4.35% |
| 4-year | 4.15% |
| 5-year | 4.15% |
Visit the EQ Bank website for the latest interest rates and other GIC terms.
Related: Best GIC Rates in Canada
How does it compare?
So how does the EQ Bank registered accounts offering compare to the competition out there?
EQ Bank RSP (RRSP) Savings Account Vs Others
- EQ Bank Retirement Savings Plan (RSP): 3.00%
- Tangerine RSP Savings Account: 5.00%*
- Maxa Financial RRSP Savings: 3.35%
EQ Bank Tax Free Savings Account Vs Others
- EQ Bank TFSA: 3.00%
- Tangerine Tax-free Savings Account: 5.00%*
- Canadian Tire Bank: 3.00%
- Steinbach Credit Union TFSA Account: 3.75%
- Maxa Financial TFSA Savings: 3.35%
*These are promotional rate for new customers. Tangerine’s rate drops to 1.00% after 150 days.
EQ Bank TFSA and RSP Accounts Vs Bonds
Bonds or Bonds ETFs are another popular way that Canadians use to add some fixed income to their portfolio.
But with the current low yield environment, you’ll be hard pressed to get a current yield above 4%.
These are the yields on some of the popular bond ETFs at the time of writing this post:
- Vanguard FTSE Canada All Cap Index ETF (VCN): 2.98%
- iShares Core S&P/TSX Capped Composite Index ETF (XIC): 2.91%
- BMO S&P/TSX Capped Composite Index ETF (ZCN): 3.31%
They all have higher yields than either the EQ Bank registered savings accounts or GIC investments.
But remember that prices of bonds are not immune to price movements. They move in the opposite direction of interest rates.
So if you’re saving for a short term goal, you’re better off sticking with an High-Interest Savings Account (HISA) or a GIC.
How to open an EQ Bank TFSA or RSP Account
Getting started with opening an EQ Bank TFSA or RSP account is simple and straight-forward.
But you must be an existing EQ Bank customer to open one of the registered accounts. If you’re not, simply visit the EQ Bank website to open a Savings Plus Account.
With your new account opened, you can proceed using the steps below:
- Sign into your account and click “Products” on the menu
- Select the registered account you wish to open
- Review your details and submit the application if all the information is correct.
You can open your new account using the EQ Bank mobile app or through your web browser.
Is It Safe?
EQ Bank’s parent company is a publicly traded company on the Toronto Stock Exchange. Founded in 1970, it has grown to become the 7 largest Schedule I (domestic) Canadian bank.
So you’re keeping your money with one of the strongest banks in Canada.
Also, Equitable Bank is a member of CDIC. So all deposits held at EQ Bank are protected up to $100,000 per insured category.
That is, deposits held in Registered Retirement Savings Plans (RRSPs), Tax-free Savings Accounts (TFSAs), Joint Accounts and regular savings/GICs are distinct insured categories and each qualify for the $100,000 coverage.
This means you can potentially maximize your CDIC coverage by spreading your money across the different account offering from EQ Bank.
Related: How To Maximize CDIC Coverage On Your Savings
Choosing between the EQ Bank TFSA and RSP Accounts
Both TFSA and RRSP have their tax advantage- TFSA lets your investments grow completely tax-free, while RRSP lets you defer the taxes until you withdraw. That is, you’ll eventually need to pay taxes on your RRSP investments.
So the TFSA may look like the better registered account, but remember you get some tax deductions for your RRSP contributions but not for TFSA contributions.
Ultimately, the choice between a TFSA or RRSP account will come down to individual tax circumstances.
If you’re in an higher tax bracket than you expect to be when you’ll need to make withdrawals, RRSP will save you some taxes.
On the other hand, if you’re saving for a short-term goal and want some flexibility on when to withdraw the money, a TFSA account will be the better choice since there are no withdrawal restrictions.
Unless you’re withdrawing from your RRSP for retirement or under the Home Buyers Plan or Lifelong Learning Plan, you will have to pay a withholding tax immediately (as high as 30% depending on how much you withdraw).
You may be able to get some of the tax back when you file your taxes though.
Related Posts:
Some FAQs
The annual TFSA limit for the year 2023 is $6,500.
The annual contribution limit for 2023 is the lower of a) 18% of your previous year’s income and b) $30,780. Plus any unused contribution room from previous years. The upper band for RRSP conttibution in 2023 is $30,780.
Yes, you need to open an EQ Bank Savings Plus account before you can open any of the registered accounts.
The current savings interest rate for EQ Bank TFSA and RSP is 3.00% on both registered accounts. Check the website for current GIC rates.
Not at the moment. EQ Bank’s US dollar account offering is currently available as non-registered account.
Final thoughts
My review of the new EQ Bank TFSA and RSP accounts are positive. With the 4 new products, EQ Bank has shown that it is ready to innovate and provide Canadians with financial products that meet their various needs.
So if you’re currently looking for a way to add some fixed income to your portfolio, the EQ Bank TFSA and RSP accounts can help you do just that.
Looking for non-registered high interest savings account instead? Check here for the best HISA rates for 2023.
Looking to get competitive rates on your USD savings, EQ Bank US Dollar Account currently offers a 2.00% savings rate and no fees. Check out my full review of EQ Bank US Dollar Account account here.
EQ Bank TFSA & RSP Accounts Review
Summary
EQ Bank TFSA and RSP Accounts let Canadians save and invest their money on a tax-advantaged basis with a current attractive rate of 3.00%.
A word of warning. Every personal access to EQ Bank is shut down and has been for several days. No phone lines, on-line chat or response to e-mail. The website also stalls and kicks you out before completing a transaction (transfer TFSA from another institution) It is questionable if EQ is even operating now.
Hi Den P,
Thanks for stopping by.
I checked their Twitter handle and it seems they are aware of the account access issues. They should provide an updates once the issues are resolved.
I was able to login to my account and sent an Interac transfer, though I couldn’t reach them via chat.