It can be overwhelming figuring out where to best store our money due to the sheer amount of options available to us now – competing banks with each of their incentives, credit unions, online only institutions, cryptocurrencies!
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I have been asked what my recommendations are for Canadian bank accounts to keep your money in.
To be honest, I don’t know the answer to the “best bank account” out there. But! I CAN share with you which ones I use and how I use them – these would be my “recommendations”.
I’ll break these down intodaily banking, short-term and long-term goalsfor simplicity’s sake. It helps that you make financial goals with timelines because this helps you determine where to best keep your money.
Daily Banking
For everyday banking, I use two banks – one for personal spending and another for real estate properties.
I useSimplii Financial*for personal spending because they offer no-fee checking accounts with unlimited transactions.I’m able to send unlimited e-transfers for free as well. With Simplii, I can use CIBC ATMs to withdraw and deposit cash…but who really uses cash these days?
Simplii is now offering YOU a $50 sign-up bonus if you use my affiliate link. The caveat? You must deposit at least $100 in your new Simplii account within 6 months of opening it and maintain that $100 in the account for at least 60 days.Here’s the link to sign-up*.
Tangerineis what I use to manage my rental properties. I have a dedicated checking account for each rental unit I manage. They are free to use so my multiple accounts don’t cost me anything. But more than saving money, it makes my bookkeeping so much easier for tax time when I can clearly track income and expenses separately for each rental unit! With Tangerine, you can use Scotiabank ATMs if you need cash but most transactions can be done online.
If you want to open a Tangerine account, you can use myTangerine Key 44760223S1*to sign up as a new customer and earn yourself a $50 bonus! You do have to have at least $250 in the account within the first 60 days to get the bonus.Seriously, would you say no to free money?
** Disclaimer: Simplii and Tangerine offer no-fee bank accounts but there are charges for other fees such as NSF fees, stop transfer fees, etc. Please read the fine print on their respective websites. **
This one is an easy one to answer. There’s really only one product I use for any short-term goals – anything where I would need to use the money within 1 to 3 years.
That’s theEQ Bank Plus Savings Account*!Currently, they are offering1.50%** interest on every dollar. This is a ‘plain old’ savings account which is what you want if you need the money in less than 3 years. You don’t want to invest and put that cash at risk in case the markets are awful when you need your money. The EQ Bank Plus Savings Account gives you some decent growth for parking your cash with them.In comparison, Simplii and Tangerine are offering 0.10% annually on their savings account. (as of February 21, 2021)
**Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.**
You can open up to 5 savings accounts with EQ Bank. Because I like compartmentalizing my goals, I set up a separate account for the following with automatic fund transfers from my everyday banking account:
- Car Repairs & Emergency Fund
- Buddy’s Fund (my French bulldog ‘fur-baby’)
- Travel Fund
- House Down Payment Fund
If you set them up one time and automate the fund transfers on a regular basis, you don’t even need to do anything anymore. Accessing the cash is easy when you need it and there are no fees to use these accounts.
Supercharge your savings or debt repayment goal
I use another product to save even more money effortlessly. You can use the money you save here to add to your short-term goals or come up with an extra payment to put towards debt. That product is Moka!
Moka*(the new and improved Mylo)is an automated investing app that rounds up your daily purchases and invests the spare change. Or in my case, I’m just saving that spare change instead of investing it. I’m saving for something in the near future… but I can’t share with you what that is quite yet.
The Moka interface is sleek and easy to use. I set-up my goal in Moka about a year ago and nowI have over $550 saved in itjust from spending money like I normally do.
Long-Term Savings
Retirement (or Semi-Retirement)
This is my only “long term” goal right now. And honestly, it is a moving target. As of today, the only thing I’m really sure of is that I won’t need this retirement/semi-retirement money for at least another 10 to 15 years.
With that kind of timeline, this is where I can play with risk a bit more. This money is currently invested in ETFs (exchange traded funds) in moderate to aggressive portfolios.I use robo-advisors to buy these investments.
If that language is hard to digest, no worries! I still feel that way today whenever I encounter weird financial terms. Basically, an ETF is a basket of securities – investments that can include lower risk types like bonds and higher risk types like stocks. Instead of buying individual stocks and bonds, you can buy a whole portfolio of them in an ETF. The benefits include simplicity (buying one ETF instead of several individual stocks and bonds) and diversification (you do not have all your money invested in just one stock for example). There are more advantages like cheaper fees compared to mutual funds and being able to buy them in your RRSPs and TFSAs for some tax advantages… but that’s information for another post.
The two robo-advisors I use are:
- Wealthsimple*– Balanced Portfolio (50% equities, 50% fixed income)
- JustWealth*– Aggressive Portfolio (99.5% stocks, 0.5% cash)
Currently, I earn between 7-10% ROI with the above allocations when I last checked (February, 2021).If you can’t tell by now, I’m a “set-it and forget it” type investor and avoid exciting stuff like day trading and cryptocurrencies(for the sole reason that I don’t have the mental bandwidth to handle it!). I’m okay with getting rich slow when it comes to my passive investments.
(Real estate is a whole different ball-game for me though so that’s where I get my excitement from!)
Group RRSP– I also have an RRSP through work. I was contributing because my employer was matching up to 2% of contributions. The money here is currently invested in an aggressive growth portfolio (100% equities) made up of mutual funds.My ROI is about 7% when I last checked (January, 2021).
(Disclaimer: The above investment returns are for illustration purposes only. These are not guaranteed returns if you invest with the companies I mentioned above.)
(MORE) DISCLAIMERS:
*THE ABOVE LINKS ARE AFFILIATE LINKS WHICH MEANS THAT IF YOU CLICK THROUGH THE LINK AND SIGN-UP, I RECEIVE A SMALL REFERRAL BONUS AT NO COST TO YOU.
IF YOU USE MY WEALTHSIMPLE LINK, YOU WILL RECEIVE THE FIRST $10,000 OF YOUR MONEY YOU INVEST WITH THEM MANAGED FOR FREE FOR THE FIRST 12 MONTHS. IF YOU USE MY JUSTWEALTH LINK, YOU WILL RECEIVE $50 FOR OPENING A NEW ACCOUNT WITH THEM. PLEASE CHECK THEIR INDIVIDUAL TERMS AND CONDITIONS TO MAKE SURE YOU QUALIFY FOR THE BONUSES.
IF YOU DON’T WANT TO USE MY AFFILIATE LINKS, THAT’S OKAY TOO. JUST HEAD DIRECTLY TO THEIR WEBSITE TO SIGN-UP – KEEP IN MIND THOUGH THAT YOU MAY NOT RECEIVE THE SIGN-UP BONUSES OFFERED THROUGH MY AFFILIATE LINKS IF YOU DO.
As of now, this mix of accounts I’m using works really well with my goals and my current financial situation. I’m sure as this changes, some of these accounts may or may not change.
I wrote this because I get asked a lot what’s the best bank account to keep your money in. While I can’t answer that specific question for you, I do share what I use as ‘recommendations’. The companies I mentioned above are companies I personally use and have had experience with. They work well for my needs.
The other reason is to hopefully help you see a different way to organize finances –by personal goals and timelines.Often times we get caught up on who gives us the most bang for our buck, or which investments will make us the most money as fast as possible(Read: Run away!!).
Other times, we don’t really think twice about where our money is parked. Maybe you’ve just done what the nice “financial advisor” at your bank told you to do – probably to put savings in a mutual fund offered by that bank. While this isn’t a terrible decision, I’m here to show you there are other options that might be more beneficial to you, for YOUR needs.And that even this process, of picking out where to best park our money, is an important part of our overall financial planning.
This may be an upside down approach than what most people are used to, but I think that’s just how it needs to be.YOUR ‘WHY’ FIRST THEN YOUR ‘HOW’ AFTER.
Where do YOU keep your money? Do you have products you would recommend? Share your thoughts in the comments section below!
