Personal Finance

Advice needed! Where to put my family emergency fund?

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  • Apr 30th, 2020 4:03 pm
[OP]
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Mar 22, 2010
64 posts
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Ottawa

Advice needed! Where to put my family emergency fund?

Hello everyone, I need your wise advice regards where to put my family emergency fund. I have set eight months of expenses aside as my family emergency fund. I am parking this fund at TFSA holding RBC Investment Savings RBF 2010. It was earning a decent interest at 1.6% until early March. In last one and a half months, the interest rate has dropped from 1.6% to 0.25%. :rolleyes:

I am looking for a high yield savings account or a money market account that can earn decent interest right now. This way, I have almost instant access to the money when I need it. I am thinking about Tangerine 2.80% for 5 months for new accounts, but the rate will be 0.25% afterwards. Maybe LBC Digital HISA 2.25% right now but all rates are subject to change at any time without prior notice? Or even any products available in RBC or TD I can purchase that will give me a better interest rate than 0.25% without opening a new account? Or any other suggestions? Your advice will be appreciated. Thanks in advance.
18 replies
Deal Addict
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Mar 25, 2012
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bobohobo2kx wrote: EQ Bank.
I can't recommend EQ Bank. They provide almost no transaction narrative detail in transaction histories or e-Statements, reverse order their e-Statements with newest transactions at the top, don't allow you to set a custom sort order for your externally linked accounts that's saved across online banking sessions, and don't have access to deposited funds limits.

Depends on the likelihood will need to access the funds in the emergency fund.

My recommendation would be Hubert Financial—https://www.happysavings.ca/. All-digital application process, easy external account linking process, expanded transaction detail for every transaction, and no transfer out fees for registered savings. Awesome dividends on your share and surplus balances.

Failing that, LBC Digital and Motive Financial would be good top picks, as would Peoples Trust or Peoples Bank of Canada's HISA. :)

Cheers,
Doug
Sr. Member
Jan 19, 2018
955 posts
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dmehus wrote: I can't recommend EQ Bank. They provide almost no transaction narrative detail in transaction histories or e-Statements, reverse order their e-Statements with newest transactions at the top, don't allow you to set a custom sort order for your externally linked accounts that's saved across online banking sessions, and don't have access to deposited funds limits.

Depends on the likelihood will need to access the funds in the emergency fund.

My recommendation would be Hubert Financial—https://www.happysavings.ca/. All-digital application process, easy external account linking process, expanded transaction detail for every transaction, and no transfer out fees for registered savings. Awesome dividends on your share and surplus balances.

Failing that, LBC Digital and Motive Financial would be good top picks, as would Peoples Trust or Peoples Bank of Canada's HISA. :)

Cheers,
Doug
As far as emergency fund goes, I would just want a safe place to park my money with easy access and without getting it eroded too much by inflation. Things like transaction history detail, ordering of e-statements/transactions and externally linked accounts are low priority for me. I also do not expect to have many transactions for an account that holds the emergency fund. If there's frequent enough transactions that I need to care about ordering of e-statements, transaction details, then I'm probably looking for a chequing account for day to day use instead.
Deal Addict
Aug 1, 2006
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Toronto
dmehus wrote: I can't recommend EQ Bank. They provide almost no transaction narrative detail in transaction histories or e-Statements, reverse order their e-Statements with newest transactions at the top, don't allow you to set a custom sort order for your externally linked accounts that's saved across online banking sessions, and don't have access to deposited funds limits.

Depends on the likelihood will need to access the funds in the emergency fund.

My recommendation would be Hubert Financial—https://www.happysavings.ca/. All-digital application process, easy external account linking process, expanded transaction detail for every transaction, and no transfer out fees for registered savings. Awesome dividends on your share and surplus balances.

Failing that, LBC Digital and Motive Financial would be good top picks, as would Peoples Trust or Peoples Bank of Canada's HISA. :)

Cheers,
Doug
Great points ! I would go with Motive Financial over LBC Digital since their site works better. Another alternative is Alterna Bank at slightly lower interest rate of 1.9 percent vs 2.2 percent at Motive. I wouldn't consider EQ Bank since they don't have an ATM card or chequing accounts. Peoples Trust doesn't have chequing accounts either.
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Mar 25, 2012
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Bull Dog wrote: Great points ! I would go with Motive Financial over LBC Digital since their site works better. Another alternative is Alterna Bank at slightly lower interest rate of 1.9 percent vs 2.2 percent at Motive. I wouldn't consider EQ Bank since they don't have an ATM card or chequing accounts. Peoples Trust doesn't have chequing accounts either.
But we're not talking about chequing accounts, so those points with Motive and Peoples Trust/Peoples Bank don't really matter. Neither does Alterna Bank. No need to recommend them when they're near the bottom of the virtual banks and credit unions on rate competitiveness. If I banked with them, I'd love to give them more business, but their lack of competition on GIC and HISA rates and their asinine $250,000 total relationship balance cap would leave me limiting my business with them to <= $5,000, and then I'd feel sort of bad for using them for free services.

The lack of a debit card isn't essential at all for EQ Bank. They have remote deposit, so cheques can be deposited remotely. The biggest issues with them are the no hold release limits and poor e-Statement and transaction history detail.

As for LBC Digital, some people have reported issues, but I choose not to rely on the mob mentality of RedFlagDeals.com and HighInterestSavings.ca as I've heard from others, there are either no problems or people get locked out because they can't remember their password or browser incompatibility. They use the same core banking platform as Motive Financial, so if one can recommend Motive, one can recommend LBC Digital.

Cheers,
Doug
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Mar 8, 2013
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EQ Bank does not offer TFSAs. Why not open a self directed brokerage account, where you have access to many institutions, and buy a ladder of 1 year GICs with whoever is offering the best rate. This is, withdraw each month from RBC, and use the funds for a 1 year GIC, in a TFSA if you still have contribution room or non-registered account until the room becomes available next January.
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Oct 7, 2013
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I believe that DUCA continues to offer 2.5% for their HISA

I would recommend them
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Mar 25, 2012
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akaManny wrote: EQ Bank does not offer TFSAs. Why not open a self directed brokerage account, where you have access to many institutions, and buy a ladder of 1 year GICs with whoever is offering the best rate. This is, withdraw each month from RBC, and use the funds for a 1 year GIC, in a TFSA if you still have contribution room or non-registered account until the room becomes available next January.
@xzhvirus already has a self-directed discount brokerage account as he holds his savings in a broker-held HISA. Laddered GIC is certainly option, but would limit his liquidity should he need to withdraw in < than one year.

Cheers,
Doug
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Mar 8, 2013
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dmehus wrote: @xzhvirus already has a self-directed discount brokerage account as he holds his savings in a broker-held HISA. Laddered GIC is certainly option, but would limit his liquidity should he need to withdraw in < than one year.

Cheers,
Doug
Since it is an emergency fund for 8 months expenses, OP presumably needs only a portion to be liquid. After the first GIC purchase, he still has the remaining balance in savings. Of course this would work better if he was aiming for 12 months expenses.
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Aug 1, 2006
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dmehus wrote: As for LBC Digital, some people have reported issues, but I choose not to rely on the mob mentality of RedFlagDeals.com and HighInterestSavings.ca as I've heard from others, there are either no problems or people get locked out because they can't remember their password or browser incompatibility. They use the same core banking platform as Motive Financial, so if one can recommend Motive, one can recommend LBC Digital.

Cheers,
Doug
You're probably right about LBC Digital. Although they make mistakes, they do get it right eventually. The big 5 banks are far behind in electronic capabilities compared to the digital banks- no linking to other accounts, bill pay list is a lot smaller etc.
Member
Jun 6, 2014
242 posts
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Toronto, ON
An option is to leave it where it is. You said emergency fund, not investment. Thus the risk portion of that choice.
Tangerine for 5 month bonus interest is a decent choice. The rate with Tangerine will change at the end of the promo. You can always call them to ask about extending the rate or moving your money at the end of the period. There's an entire thread about that on this forum.
You can also do a GIC ladder with the 270 day GIC at Tangerine. It would keep your funds flexible.
[OP]
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Mar 22, 2010
64 posts
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Ottawa
icedtea365 wrote: An option is to leave it where it is. You said emergency fund, not investment. Thus the risk portion of that choice.
Tangerine for 5 month bonus interest is a decent choice. The rate with Tangerine will change at the end of the promo. You can always call them to ask about extending the rate or moving your money at the end of the period. There's an entire thread about that on this forum.
You can also do a GIC ladder with the 270 day GIC at Tangerine. It would keep your funds flexible.
Thanks for the advice. Tangerline is a decent choice.
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Aug 18, 2005
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If it was me, I'd use Motive or Happy Hubert. Actually my main emergency fund is in Hubert right now.
- casual gastronomist -
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Jul 22, 2015
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Ontario
DUCA has a good rate at 2.5% and Tangerine is offering 2.8%. These are good rates, but they drop their rates at the end of the promotional period. If you're okay with switching money from bank to bank to chase the best promo, I'd go with these two. If you prefer to just leave your money at one bank that provides a good rate and not worry about switching every few months, I'd go with EQ Bank which offers 2% every day.

Personally, I'm not a fan of Simplii, LBC, or Motive.
[OP]
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Mar 22, 2010
64 posts
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Ottawa
Acheewawa wrote: DUCA has a good rate at 2.5% and Tangerine is offering 2.8%. These are good rates, but they drop their rates at the end of the promotional period. If you're okay with switching money from bank to bank to chase the best promo, I'd go with these two. If you prefer to just leave your money at one bank that provides a good rate and not worry about switching every few months, I'd go with EQ Bank which offers 2% every day.

Personally, I'm not a fan of Simplii, LBC, or Motive.
Decided to go with Tangerine at least 5 months, thank you all for advices.

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