Do you know the interest rate paid on your bank account? It’s probably between 0% and 2%, depending on the account balance, the type of account and the financial institution you use.
For example, the RBC No Limit Banking account has an interest of 0.000%. That is the type of banking account that most people have for payroll deposits, bill payments and debit transactions.
If you ask your bank for an account that pays a higher rate, they will likely direct you towards something like the RBC High-Interest eSavings account. This type of account has high transaction fees, except for online transfers to and from your regular banking account, so it is not ideal for day-to-day banking. But if you have some extra cash to leave in this account, you will be rewarded with an interest rate of…0.050%. That is one-twentieth of one percent.
The big banks don’t need to offer high interest rates for these products because they know that most of their customers will not shop around. But you can find higher rates at smaller banks and credit unions as these institutions have to compete for your business.
Seven years ago, I set out to find a high-interest savings account that would seamlessly integrate with my existing bank account. I did not want to give up the conveniences of banking with a large institution, and I did not want this new account to be a lot of work. I found my solution in the land of high-interest-paying credit unions: Manitoba.
Achieva Financial consistently offers among the highest savings account interest rates in the country. Currently, this rate is 2%, which is 40 times the RBC rate mentioned earlier. Despite being based in Manitoba, anyone in Canada can open an account.
Achieva is an online-only credit union, which probably helps it pay such high rates. Being online only is also likely the reason for its killer feature: Achieva Direct Transfer. This allows you to either pull funds from an account at another financial institution or to push funds back to that account. This means that you can use it to complement an existing account at one of the big banks. The only downside is that transfers take 3 business days, but it’s just a minor inconvenience.
Achieva’s fee structure also makes it ideal for a complimentary account:
- No monthly account fee
- Free Achieva Direct Transfers from another financial institution
- One free Achieva Direct Transfer out per month ($1.00 per additional transfer)
- Achieva pays you $1 per month when you opt for electronic documents
For every $10,000 you have in an Achieva account, you would make an extra $16 per month compared to the RBC High-Interest eSavings account. This may not seem like a lot on its own, but its such an easy change to make. And if you are saving up to buy a home, you could easily be looking at hundreds of dollars a month.