EQ Bank Enhancements Make it Better Than a "Real Bank"

When my husband Rich and I first joined the CDIC-backed EQ Bank in 2016, we used it solely as a savings account that paid a great interest rate (2.25 percent at its inception).  There weren't any other banking functions available and you needed to link to a "real" bank to to transfer money into or out of the account.  Yet as a savings vehicle, it offered everything we were looking for--totally liquid cash (as opposed to locked in term GICs), a steady interest rate that was significantly higher than what was offered at the "Big Banks", no minimum balance required, free unlimited transactions, no service charges (albeit no services to charge for) and no teaser rates that evaporated after some short period of time.  We also took advantage of EQ Bank's US savings account which currently pays an unprecedented 3% on US funds, again with no minimum balance required and no fees (and this is the normal rate, not a 3 month teaser like so many other banks offer).

While EQ Bank only acted as a savings vehicle, we used Simplii Financial (CIBC's branchless no fee option) to handle all the rest of our banking needs and to pay off our monthly expenses.  Only if we received excess dividends beyond our expense requirements for the month would we transfer the extra funds to EQ Bank for long term savings goals.

Over the years, EQ Bank has gradually been adding more and more banking functions.  Today, we can almost use it as our primary bank.  We are now able to set up automatic deductions to pay for reoccurring expenses, set up recurring or one-time bill payments to common vendors, send and receive free unlimited Interac payments and electronic money transfers, generate an online "void cheque" to link to any other bank, deposit cheques using their mobile app, and send money internationally if required.

Most recently, EQ bank has added yet another feature which brings it even closer to being a "real bank".  It introduced a bank card onto which you can preload funds from your savings account.  You continue to earn the going interest rate while the money sits on the card, and you can withdraw funds from the card using ANY Canadian bank's ATM for free (EQ bank covers the charges). The convenience of this is staggering as we are no longer tied to our own bank's ATMs.  On top of that, you earn 0.5% cashback on any purchases made using the card, with the rewards being deposited into your savings account.  This certainly beats the debit card from our current bank which offers no rewards.  It can be used internationally anywhere that Mastercard is accepted and charges no foreign transaction fees.

In effect, our EQ Bank has turned itself into a high interest savings AND chequing account all in one.  With all these new features, it makes sense for us to use EQ Bank as our primary bank for most of our banking needs while earning the excellent interest rate (currently 2.5% calculated daily) on all funds that we store there.  I have been working over the past month to make this happen.  I contacted each of the billers that we had set up to automatically pay monthly from our Simplii account and provided the banking info for our EQ Bank account instead.  This included our condo fees, property tax, and hydro bill.  I updated the banking info on our CRA accounts so that our tax refunds would be automatically deposited into EQ Bank.  I registered each of our Canadian credit cards so that we could make monthly one-time payments to pay off the balances.  I reassigned my primary email address to link Interac payments to EQ Bank while assigning a secondary email to Simplii Financial.  This way, nothing changes for all the people who have set me up as a contact for Interac e-Transfers but now the money automatically routes to EQ Bank.  I applied for an EQ Bank card, loaded it with some funds and will use this for any "debit-like" payments at stores that don't accept credit cards.  And most importantly, I linked my EQ Bank account to my Scotia iTrade non-registered account so that each time we receive dividend payments in our non-registered accounts, I can transfer the cash directly to EQ Bank, minimizing the lag time before our money starts earning the daily interest.

Today I closed my Simplii Financial "High Interest Savings Account", leaving only my chequing account with that bank.  When the agent asked me why I was closing the account, I replied that despite its name, at 0.40%, it does not actually pay high interest (or even medium interest), relatively speaking.

At this point, EQ Bank meets about 90% of our banking needs but there are still a few things that it doesn't do (yet?).  

1. Even though I have an EQ Bank US funds savings account, I cannot directly pay off my TD US VISA from those funds.  EQ Bank does not recognize non-Canadian currency credit cards as billers.  When I need to pay off my US credit card, I will have to transfer US cash from my US EQ Bank account to my US TD Bank account (which pays no interest!) and pay off the credit card from there.  
2. Smaller vendors are not currently registered with EQ Bank.  When we needed to pay an invoice issued by the contracting firm who will do renovations on our condo, I could not add them as a biller within EQ Bank as they were not found in the billers list.  National Bank has an interface where you can add unknown billers by providing info including their bank, transit and account numbers.  So far, there is nothing like that in EQ Bank.
3. There are no physical cheques provided with EQ Bank (other than the online void cheque for linking accounts), so when there is a need to write a cheque, I need to move money back to my Simplii chequing account and write the cheque from there
4. You cannot specify a beneficiary for your savings account(s)

These are infrequent inconveniences that I can happily live with in order to reap all the benefits of my EQ Bank account.  

While we can't use EQ Bank as our only bank account, in so many ways it is better than anything the Big Six banks are offering.  EQ Bank has a referral program that pays $20 to both parties for the first 3 successful referrals, $30 for the next 4 and $40 after that up to a maximum of $500.  If all this sounds good to you and you want to join, shoot me an email at retiredat48book@gmail.com and I can refer you.  We can both make $20 😁

UPDATE: As of 2023, EQ Bank offered 0.5% extra interest on your savings account if you direct at least $500 of pre-authorized payments to be regularly paid from that account.  As of 2024, they are offering an additional 1% on top of that if you direct your pay into the account, for a total of 4% if you do both.  Unfortunately, "pay" only applies to employment income, not retirement income (e.g. RRIF withdrawal) so we don't qualify for the additional bonus.  Those of you who still work and are paid by a company do though!