Motusbank review: the new player in Canada’s virtual banking sector
Hand out / motusbank
Updated: August 09, 2024
4.0
4.0
Our rating4
Here’s a new player hoping to inject some excitement into Canada’s virtual banking arena. motusbank (note the Millennial-targeting, lower case moniker) is the country’s newest, full-service, discount, online bank. It’s hoping to win over clients with a customer-focused ethos that touts high interest rates and low-to-no fees. As a subsidiary of Meridian, one of Canada’s largest and most popular credit unions, motusbank benefits from instant credibility when it comes to offering more customer-driven service than traditional banks, and its user-friendly website and bold, colourful branding make it stand out from Canada’s staid Big Five financial behemoths.
But the real question is: How does motusbank stack up to its direct competitors—discount, online banks like Tangerine, EQ Bank, and Simplii Financial—in terms of its fees and interest rates, the two indices that matter most to virtual banking customers?
* Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.
Chequing accounts
Chequing accounts offered by traditional banks typically provide an almost unnoticeably negligible amount of interest on the account balance. In addition to these abysmally low rates, many chequing accounts with the big banks also charge fees for transactions, charges that can only be avoided by keeping a minimum deposit amount or paying a monthly service fee.
Not only does motusbank’s chequing account not charge a fee for most transactions, it also one-ups traditional accounts with its 0.15% interest rate. Sure, that interest rate isn’t a head-turner compared to what you’ll find with savings accounts (see below), but it’s certainly among the highest in the country within the chequing sector.
High-interest savings accounts
Motusbank offers an impressive 2.5% interest rate for its HISA. It’s important to emphasize that this is a permanent rather than promotional rate, i.e. a higher-than-usual rate that some banks offer for a short period of time to hook new clients before reducing the rate significantly after the promo ends. motusbank’s HISA also includes no minimum balance or monthly fees for self-serve transactions, like transfers and withdrawals. On the other hand, Tangerine’s savings account (which also charges no fees for a variety of services) offers a comparatively ho-hum interest rate. EQ Bank’s Notice Savings Account, however, ekes ahead as the overall (no fees, no monthly balance) HISA winner with a rate of up to 3.65%* with qualifying direct deposit.
Sign up for EQ Bank* 30-Day Notice Required. Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.
Tax-free savings accounts
Canadians love their TFSAs. And why shouldn’t we? As a flexible account (TFSAs can hold investments like stocks, bonds, ETFs, and more) it’s one of the best methods Canucks have of earning tax-free income.
motusbank offers a no-fee, no minimum balance TFSA that earns 2.05%.
Tangerine, by comparison, offers the same rate on its TFSA that it does their HISA, at 0.70%.
Simplii Financial’s rate on its TFSA is 0.40% and its HISA extends up to 3.75% with over $1 million in your account. If you have under $50,000 your HISA rate is 0.35%.
GICs
GICs are a popular way to save for those who favour a slowly-but-surely form of investment.
Currently, motusbank is offering a 5-year fixed rate GIC at 3.00%; the bank also offers TFSA GICs at 3.00%.
With Tangerine, you’ll get a 5-year GIC at the rate of 4.05%.
EQ Bank has a five-year GIC rate at 3.90%.
NOTE: EQ Bank GICs: Rates are calculated on a per annum basis and are subject to change at any time.
Mortgages
Buying a home is a significant financial milestone for many Canadians, and finding a reasonable mortgage rate is the first important step in any house-hunting expedition. Mortgage rates vary widely depending on whether you’re looking for a variable or a fixed rate, and according to the timeline you’re working with. Banks also occasionally offer special rates, so be sure to always check with individual financial institutions to get the most up-to-date mortgage rates.
Sandra MacGregor has been writing about finance and travel for nearly a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star.
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