I’m sure I’m not the only one who does this but I have 3 high interest savings accounts:
- Tangerine (my referral key for your free $50 = 32726976S1)
- PC Financial
- EQ Bank
At any given time, EQ gives a general good rate, so if you don’t want to spend time chasing a better one, you can safely bet on EQ for the entire time. It won’t be the best one as it is not a promotional rate (e.g. EQ gives 2% while Tangerine has a promo on for 3.1%), but it is not pathetic like 0.1% or less! *horrified*
Otherwise, if you enjoy earning the best rate, you need to have multiple savings accounts and to shuffle your money between them.
I link all my bank accounts together with cheque a (I only don’t have a chequing account with EQ) and I move my money around.
Why? “New Deposits”, that’s why!
The key is that a lot of this promotional interest business is based on NEW deposits only, not what you currently have in there at the moment.
So for instance if you had:
$500 PC Financial
$0 EQ Bank
And PC gave a promotional rate of 3% on new deposits from September to December, you could transfer $1000 from Tangerine to PC but only that $1000 gets the 3% because it is the New Deposit over your starting balance.
The original $500 in there earns its regular rate of 0.6% or whatever it is today.
Now if you had this situation in December:
$1500 PC Financial
$0 EQ Bank
And let’s say Tangerine offered 2.5% on new deposits from January to March and PC matches the offer, saying the same thing, you’re better off moving $1500 from PC to Tangerine starting January 1st because it will now be considered a NEW deposit.
So your full $1500 now earns 2.5% at Tangerine instead of sitting at PC at 0.6%.
I keep shuffling my money around in the same manner, moving my emergency fund from one bank to another as long as I maintain “new deposit” status.
1. Make sure to still pay your bills on time
If anything is automated, make sure you have enough to cover it each month
2. Make sure your bank doesn’t charge you money for $0 or below $$ balances
Some banks like TD charge you money for not having a minimum balance in there or having no money at all in your chequing accounts.
(PC and Tangerine don’t charge you a penny for these kinds of fees.)
3. Keep track of where your money is at all times
Make sure you know that Oct 1st it is being moved to This Bank and has already been debited from That Bank… Etc.
Don’t double debit by mistake and get slammed with a fee.
4. Make sure your money is in your CHEQUING ACCOUNT
As you’ve linked the Chequing accounts, you need to shift your money from Chequing to Savings. It doesn’t work from Savings to Savings, because you didn’t link your SAVINGS account
Otherwise you will get slammed with a Insufficient Funds (NSF) charge for not having enough money to move in from your chequing to savings.