OTTAWA—The Bank of Canada’s No. 2 official endorsed a competition shakeup in the highly concentrated financial-services industry, saying the country’s banking sector is an oligopoly and changes could help lift Canada’s prolonged productivity slump.
Carolyn Rogers, the central bank’s senior deputy governor, on Thursday said Canadian authorities have done a stellar job in regulating banks by ensuring they have enough capital to survive shocks such as the 2008-09 financial crisis and the Covid-19 pandemic. “It would also be hard to argue, on any objective measure, that Canada’s banking system is anything other than an oligopoly,” Rogers told a blue-chip Toronto audience.
While I had my usual skepticism about what that number represents, I wasn’t surprised by the sentiment. Of course newcomers fear making financial mistakes. Would it be any less noteworthy if the number were 65% instead? Probably not. The point remains: newcomers are worried, and rightly so.
When you’ve just arrived in a country and you’re trying to make sense of systems that are unfamiliar, the fear of getting something wrong isn’t just rational, it’s expected. The Canadian financial system, for many, doesn’t feel like a place to build confidence; it feels like a labyrinth. For those still learning the language(s), navigating new jobs, figuring out where to live, and understanding cultural norms, the financial part can feel like one stress too many.
But something else in the report stood out to me and it subtly shifts the conversation. The data showed that 38% of newcomers reported little to no understanding of the Canadian banking system. That’s high. But 25% of the general Canadian population said the same thing. Similarly, 51% of newcomers said they didn’t understand how to invest money in Canada, compared to 35% of the broader population. The gaps are there, but what these numbers quietly suggest is that while newcomers may struggle more, many Canadians are struggling too.
This isn’t just a newcomer problem. It’s a Canadian problem.
Earning, saving and spending in Canada: A guide for new immigrants
Everyone’s staring at the same dishwasher
Understanding Canada’s financial system—especially through the eyes of a newcomer—often feels like trying to operate a dishwasher for the first time without knowing what it is or how it’s supposed to work. You know it’s meant to make life easier, but the buttons don’t make much sense, you’re unsure whether you’ve added the detergent correctly, and every unfamiliar sound makes you wonder if something’s gone wrong. After a while, it starts to feel safer to wash the dishes by hand—slower and less efficient, but at least familiar.
That’s how many of us approach banking, investing, taxes, insurance, and credit. These tools are designed to help us, yet figuring out how to use them—and, more importantly, how to trust that we’re using them correctly—can feel risky. The fear of getting it wrong often keeps people from even getting started.
I’ve lived in Canada for over six years and I work in the financial services industry, supporting organizations and spending a good deal of time thinking about how these systems function. Still, familiarity doesn’t always translate into confidence. Every year, I find myself hesitating over a relatively minor investing decision: what to do with the government match on my daughter’s registered education savings plan (RESP). It’s one small part of a much bigger plan for her education… a decision I’ve made before, but it still ties me up in knots. What should be simple ends up feeling complicated. I overthink it. I question what I know, and I hesitate.
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In those moments, despite all the exposure and experience I’ve had, I still feel like I’m standing in front of that same dishwasher, unsure which button to press and worried that one wrong choice might set something off I can’t undo.
When trust disappears without warning
Not long ago, I got a call from my financial advisor—someone I’d built a relationship with over several years. She let me know, somewhat casually, that she’d moved branches and would be handing off my account to someone new.
I understand that people change roles and businesses reorganize, but this wasn’t just a logistical update—it meant losing the one person in the Canadian financial system I trusted. She’d taken the time to understand how I think, how I approach decisions, and how I sometimes spiral before settling on a choice. Now I was expected to trust someone new, just like that.
It felt like having your surgeon swapped the night before a procedure—not because the new person isn’t capable, but because trust doesn’t transfer. In something as emotional as money, especially when the system already feels overwhelming, trust matters.
That’s the part no survey captures. It’s not just about how much someone understands. It’s about how supported they feel, and whether they believe someone is walking the path with them instead of standing off in the distance, pointing them in a vague direction.
The bigger issue isn’t knowledge, it’s confidence
At the heart of it, what the TD survey is really saying—and what many of us feel but don’t always articulate—is that people fear making financial decisions because they don’t trust that they’ll get it right. And when you don’t feel confident, every step forward feels like a risk.
This fear is real for newcomers, but it’s also real for the person who’s lived in Canada their whole life and still feels anxious at tax time. It’s real for the couple trying to figure out if they’re saving enough. It’s real for the entrepreneur who feels like banking is something you endure, not engage with.
Speaking of entrepreneurs, another finding from the report stood out. Half of all newcomers said they’re interested in starting a business, but 62% reported not knowing enough about the financial products available to help them. That struck a chord.
Generally speaking, opening a bank account is pretty easy. Most of the time, one can simply walk into a bank, provide all of the relevant documents, and have a bank account opened for them the same day. There are even multiple banks that allow one to open an account online in minutes.
That said, actually using your bank account in the manner you want isn’t always the easiest. For example, one internet user went viral after calling out banks for low balance and maintenance fees, effectively accusing the bank of charging customers for not having money. Another claimed that his bank closed his account for making too many cash deposits.
Still, the actual act of opening an account is relatively easy. Unless, it seems, you’re TikToker Adrianna (@iismama).
In a video with over 114,000 views, Adrianna shows part of a dispute she had with a worker at a Waldwick, New Jersey, Chase Bank location.
What Went Wrong With This Chase Bank Account Opening?
In her video, the TikToker shows an argument she is having with a Chase Bank employee. It’s unclear what exactly happened from the video. However, in the caption and a follow-up video, she provides further explanation as to what led to this encounter.
According to Adrianna, she went to a Chase Bank located at 53 Franklin Turnpike in Waldwick, New Jersey, in order to open up an account. She passed several employees hanging out outside along the way.
When she got inside, an employee told her they would be right with her. Then, one of the other employees outside entered the building and allegedly told her something to the effect of, “You don’t live over here. You’re not from here. You cannot open an account.” She recounted this in her follow-up video.
Adrianna says all of this occurred before she provided any identifying information, such as a full name and address.
In the caption of the original video, Adrianna notes that she is actually from the area while alleging that the employee followed the encounter by trailing her out the door, saying, “This just sounds fishy.”
She confronts them
The TikToker says she originally accepted the employee’s statement. It was only when she returned to her car that she realized something was amiss and decided to return—and record.
As one can see in the video, the confrontation goes back and forth for a while without really getting anywhere. When the question of whether race played a role in the denial of an account—the TikToker says she is Black and Mexican—the man in the video announces repeatedly that he’s Puerto Rican.
“Like that excuses it,” Adrianna writes in the caption of the original video. “I came to bank, not get profiled. No one should be made to feel like they don’t belong for just walking into a branch.”
“Tell me I’m not crazy,” she continues. “That’s profiling, right?”
Can Banks Really Deny You For Being From a Different Area?
Many commenters believed that Adrianna was, in fact, experiencing profiling. This aligns with her claim that she had not provided any personal information before the bank told her she could not open an account.
However, some in the comments questioned whether one could really be denied an account opening just because they’re not from the area.
In short, the answer is yes, though that doesn’t mean it’s common. Fraud experts note that financial institutions may view an applicant located outside their geographical region as a red flag. That said, this alone would likely not be enough to cause a rejection, especially at a bank with many branches like Chase.
As far as other details that could have set the employee off are concerned, there don’t seem to be many. The TikToker did not appear to have made it far enough into the account-opening process to trigger any of the other red flags commonly used by banks to detect fraud.
The TikToker Responds
In an email to the Mary Sue, Adrianna said Chase has not reached out to her since posting her video.
“I emailed them and also made a complaint over the phone, but I haven’t heard anything back,” she wrote. “I ultimately decided not to open the account—honestly, I just didn’t feel comfortable moving forward with a bank where I was treated that way.”
Regarding the idea that the employee was genuinely suspicious of fraud, she says that doesn’t excuse his behavior.
“I understand that fraud is a real issue, but I don’t think it’s fair to make assumptions about someone or turn a situation into something it’s not, especially when there was no prior interaction or issue,” she detailed. “My main reason for going to Chase was to open an account and eventually get a credit card. I already have several credit cards and wanted to continue building my credit — not just with the bank I currently use, but also with Chase, since they offer multiple programs to help build credit that seemed like a good fit for me.”
“At the end of the day, I went in with good intentions and was met with unnecessary suspicion, and that really changed how I saw Chase as a potential banking partner,” she concluded.
Users under the video seemed to believe that the TikToker had been profiled. However, some said that denials like these weren’t uncommon.
“Their intuition told them something was off and it’s EXTREMELY common for scammers to go out of area to open fraudulent accounts, sounds like the banker smelt something fishy and declined to open the account. 13 years in banking,” wrote a user.
@iismama @chasebank count your days. I went to the Chase branch at 53 Franklin Turnpike in Waldwick, NJ, just to open an account. A rep said he’d be right with me, so I sat down all good. Then another employee walks in, shakes my hand, and says, “You don’t live or work around here you can not open a account here.” Mind yall I never even told him where I’m from, an why would I go to a different branch when I live IN THIS AREA. I asked, “What does that matter?” and he starts following me outside saying, “This just sounds fishy.” So I started recording. When I asked if it was because of my skin color, he hit me with, “I’m Puerto Rican,” like that excuses it. I came to bank, not get profiled. No one should be made to feel like they don’t belong for just walking into a branch. Tell me I’m not crazy that’s profiling, right? #ChaseBank#RacialProfiling#BankingWhileBlack#WaldwickNJ#StoryTime♬ original sound – iismama
“I’ve never in my LIFE heard from a BIG BANK that you can’t open an account if you don’t live in the area, that’s INSANE. they definitely profiled you,” countered another. “I know so many people that use big banks and don’t even live in the same state that a branch is in! what tf.”
“Nope- u should have asked for his business card and the business card of the bank manager and then the number/address to Executive Complaints,” advised a third. “Do not contact customer service – go over their heads cause this is an example of profiling.”
The Mary Sue reached out to Chase via email and @iismama via email, TikTok direct message, and Instagram direct message.
Credit unions are similar to commercial banks in that they offer chequing and savings accounts, mortgages, business loans, online banking and registered savings plans—all for lower or no fees than traditional lenders. But credit unions are co-operatives and therefore tend to be much smaller than the major banks.
Customers have to buy a one-time membership share to get started, said Wendy Brookhouse, certified financial planner and CEO of Black Star Wealth. “Walk in, say: ‘I’d like to become a member’ and pay for your membership share,” she said. “You’re now banking there.”
Photo Handout Wendy Brookhouse / The Canadian Press
Lower fees, higher community investment
As not-for-profits, credit unions are usually community-oriented, Brookhouse said. That makes them a good fit for socially conscious people who want their money to stay within their community. “Their whole goal is to use the money to either make better services, invest back in the community, or invest in getting better rates or better whatever for the clients,” Brookhouse said.
Credit unions have also become an attractive alternative to traditional banks for many cost-conscious Canadians, said Natasha Macmillan, director of everyday banking at Ratehub.ca. “People are looking to diversify,” she said. Macmillan said many want to minimize their banking fees, higher interest rates on savings and the possibility of a lower rate on their loans. “As people are feeling the cost of living increases and things like that, they’re really looking to get the best bang for their dollar.”
She said she sees more Canadians trying to move away from big banks that may require a minimum amount sitting stagnant in a chequing account to forego bank fees, or that have monthly charges of as much as $30. Most credit unions have significantly lower fees. “People are becoming more aware about the options out there, and so we are anecdotally hearing that people are making the switch to some of these credit unions,” she added.
The best online banks and credit unions in Canada
Balancing benefits with convenience
Credit unions, the vast majority of which are provincially governed and geographically-focused, are a popular go-to in Quebec, British Columbia, and Alberta, where there are some large regional players. Desjardins is by far the largest, Vancity, Servus, and Meridian have memberships in the hundreds of thousands. Others, such as those with beginnings in labour groups or religious and cultural communities, are smaller.
They’re also not regulated under the Bank Act, which governs the commercial banks in Canada. Instead, each of the provinces regulate deposit insurance coverage for credit unions, similar to the Canada Deposit Insurance Corp., protecting consumer deposits in case a credit union goes out of business. Provincial deposit insurance coverage for its members is equal to or higher than that of the big banks, according to the Canadian Credit Union Association.
Despite the potential savings and other benefits though, experts say some Canadians might be hesitant to bank with a credit union because of a lack of convenience. Macmillan said credit unions often have limited branch networks, which can be inconvenient. Members can also get dinged for ATM withdrawals if they’re not using an ATM within the credit union’s network. There are also limited investment options in their wealth management services compared with a full-service bank, she added.
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Macmillan said it may not be a bad idea to have multiple bank accounts, including one with a credit union. “It’s really about not focusing on putting all of your money in one bank, but really looking at what the purpose is and why you might want to switch,” she said.
Deciding if a credit union is right for you
Some credit unions may also require members to meet eligibility criteria, such as being a part of a religious or ethnic community, a worker in a particular industry, or a student, to set up an account, said certified financial planner Cindy Marques.
“Not everyone will meet the eligibility criteria to be a credit union member,” she said in an email. Marques said digital banks have also made the space more competitive, offering better deals to customers. “I don’t necessarily feel that a credit union is the best solution for many Canadians seeking an alternative,” Marques said.
Brookhouse said choosing to bank with a credit union comes down to personal preference. For example, Brookhouse said she might recommend her client consider a credit union if it lends up to 100% for a mortgage. Credit unions also work well for those with simpler day-to-day banking needs, such as making deposits, paying bills, and saving. It may not work well if a client has to conduct foreign transactions, she said.
Before switching lenders, Brookhouse said it’s important to understand what networks the credit union is a part of and how that would affect the movement of your money. “If I’m doing an Interact transfer to somebody, what is the cost with the credit union versus the bank? How many days does it take? Or is it instantaneous?” she said. “Sometimes it’s just understanding it, and then you adapt, versus, is this a deal-breaker?” Brookhouse said.
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AI might be of importance in the financial services industry, but it doesn’t seem to be top of mind for the two presidential candidates. During the presidential campaign, Democrat Kamala Harris mentioned AI four times while Republican Donald Trump mentioned the tech eight times, the report stated. Considering the candidates on Election Day today, […]
If you’re looking for a chequing-style account that you can use daily and use to save while also earning interest, consider EQ Bank’s Personal Account. You’ll earn 2.25% interest, or you can bump that up to 4.00% if you direct deposit your paycheques. There are no fees or minimum balance requirements, and account holders get unlimited transactions (yes, really).
You can also take advantage of the EQ Bank Card with this account. You can use it to withdraw from any ATM in Canada, and EQ will reimburse the fees. Plus, when you use this card, you’ll pay no foreign transaction fees for purchases made in currencies other than Canadian dollars. And, last but not least, you’ll earn 0.5% cash back when you use this card. And that’s not a promotion—that’s the everyday return.
For the EQ Bank Card, interest is paid into the linked Personal Account and cash back is paid into the Card, both paid out monthly. (See the EQ Bank Card Agreement for details on earning cash back and other terms and conditions that apply to the EQ Bank Card.)
EQ Bank Joint Account
If you want to share all the benefits of the Personal Account with up to three people, check out the EQ Bank Joint Account. It’s got the same high interest rates with no fees on everyday banking. Joint accounts are a great way to manage money between spouses, roommates, family or even friends when you share finances. Having the same goal, such as saving up for a trip or even paying rent, is a breeze when there’s a single account between you.
EQ Bank Notice Savings Account
If you’re looking for a safe, high-interest account and you’re comfortable planning your withdrawals in advance, the EQ Bank Notice Savings Account might be just the thing.
Here’s how it works: You deposit your funds into your EQ Bank Notice Savings Account and agree to give the bank notice (hence the name) before making a withdrawal. There are two different Notice Savings Accounts: With 10 days’ notice, you’ll earn 4.00% on your deposits, and with 30 days’ notice, you’ll earn 4.25%. There are no fees, minimum deposits or balance requirements, and you can make as many withdrawals as you want—a bonus is that you continue earning that high interest through the withdrawal period, too.
EQ Bank US Dollar Account
If you need an account for U.S. dollars, EQ Bank’s US Dollar Account may be a good option. It has highly competitive exchange rates and no monthly fees, and it offers an extraordinary 3.00% interest rate. (Foreign currency transactions will be subject to the Mastercard Currency Conversion rate. EQ Bank does not charge any additional FX fee or markup.)
If you’re looking for ways to get more out of your money, promotional interest rates can be tempting—but don’t forget to weigh your options. Accounts with lasting high rates, plus other benefits and no fees, might offer a better alternative.
17. 2018: Transitioning to more protectionist policies, the United States initiated a renegotiation of the North American Free Trade Agreement (NAFTA)—brought into force in 1994. The Canadian government worried it could significantly affect exports to the country’s largest trading partner. The conflict led to a short-lived but dramatic trade war. Canada, the United States and Mexico ended up negotiating a new trade deal—the United States–Mexico–Canada Agreement (USMCA)—which includes a sunset clause after 16 years.
18. 2019: The federal government was concerned about retirement security, with the decline of workplace pension plans and Canadians’ low savings rate. So, it expanded the Canada Pension Plan (CPP). The public pension plan will grow to replace 33.33% of Canadians’ average work earnings, up from 25%. Over the seven-year roll-out of the program’s enhancement, CPP contributions will also continue to increase.
19. 2020: The COVID-19 pandemic swept through the world, and it had dramatic repercussions on the economy. The federal and provincial governments enacted various degrees of lockdowns across Canada to try to contain the virus’ impact.
Image by Drazen Zigic on Freepik
20. 2020: The government spent hundreds of billions of dollars to pay for benefits that encouraged Canadians to stay home and practice social distancing, most notably, the Canada Emergency Response Benefit (CERB), which was a $2,000 taxable monthly payment. The government also loaned huge sums to businesses to support them through lockdowns that prevented many from operating. The high spending level is one of the factors that led to runaway inflation over the next few years.
21. 2021: Saving rates increased significantly during the pandemic at the same time that the Bank of Canada dropped interest rates to historic lows. Those factors and others led to a boom in Canada’s housing market. Previously, high prices had been mostly limited to major cities, but 2021 saw housing prices rise across the nation, exacerbating long-standing housing affordability issues.
22. 2021: The huge supply of money that entered the economy during the pandemic due to government spending and borrowing, plus supply chain disruptions, led to a dramatic increase in inflation. Houses, cars, groceries and other daily essentials all rose significantly in price.
23. 2022: The Bank of Canada started hiking interest rates rapidly to try to tamp down runaway inflation. Housing prices stabilized (and even fell slightly), but affordability remained an issue as some borrowers’ mortgage payments increased, even doubled. The stock market entered a slump, while prices on everyday goods like gas and groceries remained high, leading to frustration for many Canadians.
24. 2023: The federal government continued to increase its immigration targets to unprecedented levels, letting in millions of international students and low-wage, low-skilled workers under temporary worker programs. The surge in population challenged Canada’s already-tight housing market and strained health-care systems. Wages, which had begun to rise shortly after the pandemic because of labour shortages, started to stabilize. Widespread support for immigration, which had for decades been positive, began to waver.
Credit card interest rates hover around 20%, roughly where they have been since the early 1980s when inflation and interest rates were in double digits. Canada’s inflation has averaged about 2% between 1992 and 2022, and all interest rates have declined dramatically with it except credit card rates. Even as inflation has exceeded 2.0% for the past few years, the recent back-up in other interest rates remains well below credit card rates. In fact, one has to squint to see any decline in credit card interest rates since 1980.
Let’s compare some numbers. In 1981, the interest rate on a Visa or a Mastercard was about 25%. Inflation was 12%, and the bank rate—the rate at which the Bank of Canada loans to the banking system—was a bit over 21%. The prime rate, or the rate of interest offered to a bank’s best customers, was 22.75%, so the additional charge to use a credit card was a mere 2.25%, which compensated the bank for demanding fewer income and collateral requirements relative to prime loans.
In summer 2024, credit card interest rates are about 20%, with an even steeper 23% rate for a cash advance. The prime rate for the bank’s best customers is 6.95%, putting the credit card spread at a whopping 13.05%. If you think that’s disturbing, back in the pandemic years, inflation was 2%, the Bank of Canada’s overnight rate was one quarter of 1%, and the prime rate was 2.45%. The credit card premium over the prime rate then was a staggering 17.45% compared to just 2.25% in 1981. The credit card interest rate has declined a mere 5% in forty years compared to a 20.3% decline in the prime rate marked in the depths of the pandemic, and 15.8% as of summer 2024.
Think about what an interest rate of 17.45% would do for your savings if you could get it. And bear in mind that your savings account was likely earning a fifth of a percent during the pandemic, and it’s your savings that are contributing to the funding of the very credit card balance on which you pay about 20%.
Or compare that heavenly credit card investment return you can’t get to the return on a government bond that you can get. If you were to invest $1,000 in a thirty-year Government of Canada bond at 3.3%, you would have $2,250 by 2053. Alternatively, if you were able to invest that $1,000 at 17.45% for thirty years, you’d have $124,621 by 2053.
The rates charged on credit cards are staggeringly rapacious, but many people are forced to pay them because they have no other borrowing options, at least none that come with the convenience of fewer income and collateral requirements.
The banks, in fact, prefer that you borrow against credit cards rather than take out a prime-based loan. To borrow at prime, the bank will ask for collateral, making the hurdle to a low(er)-rate line of credit more difficult to clear than the hurdle to credit cards. They do this because they make so much more money off credit cards. OSFI (Office of the Superintendent of Financial Institutions) data show that banks make almost as much every quarter on credit cards as they do on their entire mortgage book, which has a significantly higher principal value.
More outrageous still are the high rates of interest charged to a credit card borrower who slips up and misses a payment, as I once did during a busy period of life. After missing a monthly deadline, I received a message from TD Canada Trust—the people who advertise that their customer service is like sitting in a big comfy green chair—that screamed at me in capital letters like a text from Donald Trump:
Sure, you get all the premium banking features you’d expect, including free Interac e-Transfers, more included ATM transactions, credit card rebates and online ID theft monitoring, but the Elevate Chequing Account also comes with access to Coursera’s global online learning platform for free. (Limitations apply. Visit coastcapitalsavings.com/elevate to learn more.) Valued at $538 per year, this benefit gives individuals and entrepreneurs the opportunity to learn in-demand skills and earn industry micro-credentials to help boost their earning potential.
With Coursera, Coast Capital members can access 11,000-plus courses and job-ready professional certificates across sectors and industries from 325 leading universities and companies. It’s a proven platform, as more than report career benefits, including getting a new job, securing a promotion and gaining applicable career skills, each of which can contribute to earning more.
“We’ve been told that if we just budget more effectively or skip our morning coffee run, we can get ahead financially,” explains Catherine Wood, chief strategy, product and marketing officer at Coast Capital. “Budgeting and saving are important, but in many cases these strategies are no longer enough. With more and more people unable to keep up with the rising cost of living, it’s clear that Canadians need to earn more to improve their financial reality. At Coast Capital, we believe that starts with access to education and training that empowers people to begin, advance, or even change their careers.”
Image courtesy of Coast Capital
Removing barriers to get ahead
In an omnibus poll commissioned by Coast Capital and hosted on the Angus Reid Forum, almost two-thirds of Canadians said they need to enhance their education or skills training to stay competitive in the workforce, yet 86% of those considering pursuing additional training feel there are significant barriers. The most common roadblocks identified were the cost of education, available time, and lack of motivation or confidence.
With Coursera, members can access courses, guided projects, professional certificates and designations in business, technology, data science, health and more. And with this free access, it’s more than affordable to learn from the likes of Yale, Princeton and other globally recognized schools, and to earn professional certifications from companies like Alphabet (Google), IBM and Meta (Facebook and Instagram).
Accessing Coursera from anywhere at any time gives you the convenience and flexibility to learn when it suits your schedule. And, do you know someone who could benefit from Coursera? You can share your free access with another Coast Capital account holder.
“Budgeting and saving are important but in many cases these strategies are no longer enough. With more and more people unable to keep up with the rising cost of living, it’s clear that Canadians need to earn more to improve their financial reality. At Coast Capital, we believe that starts with access to education and training that empowers people to begin, advance or even change their careers.”
Catherine Wood, Chief Strategy, Product and Marketing Officer, Coast Capital
Start building a better financial future by becoming a Coast Capital member and taking advantage of up to $1,200 in total value when you open an Elevate Chequing Account. (Conditions apply.)
Partner content provided by Coast Capital.
This is a paid post that is informative but also may feature a client’s product or service. These posts are written by the client and edited by MoneySense.
It also ditched U.S. expansion efforts after selling its U.S. book of business to Betterment in 2021, and sold its Wealthsimple for Advisors to Purpose Advisor Solutions as it focused in on Canadian consumers.
The company’s valuation is also down from its peak. Power Corp., which across several divisions together held a 55.1% undiluted equity interest as of June 30, said the fair value of its holding was $1.5 billion. That’s down from $2.1 billion in 2021.
But the company has still managed a steep climb in assets from growth across the board, whether it’s wealth management, trading and brokerage or its banking business, said Katchen.
It comes as Wealthsimple increasingly positions itself as a full-suite alternative to the big banks, including boosting its banking services last year, that has helped lead to a $20 billion boost to the bank’s net deposits.
“We’ve been pretty excited about a more complete product offering,” said Katchen.
Product expansion to include mortgages, credit and insurance
Wealthsimple, which also offers tax services after buying Simpletax in 2019, launched a mortgage offering earlier this year and plans more credit products ahead along with an expansion into insurance, he said.
It’s all part of the company’s effort to rival the big banks, by having more than a trillion dollars in assets under administration.
While Katchen had originally said he’d want to reach that goal within the first 15 years, he’s now aiming for a slightly less ambitious timeline of within 20 years of co-founding Wealthsimple.
Earlier this year, the HBP got a significant makeover. Here’s what’s new about the HBP, plus how you can use it together with other savings tools: a first home savings account (FHSA), a tax-free savings account (TFSA) and—recently introduced in Canada—EQ Bank’s Notice Savings Account. Read on for more details.
How has the Home Buyers’ Plan changed?
Home buyers should know about two major changes to the HBP. First, you can take out more money from your RRSP to buy or build a home—the maximum withdrawal amount has increased from $35,000 to $60,000, as of mid-April 2024. Couples can withdraw up to $120,000.
Second, you have more time to pay back your RRSP. As a temporary relief measure, home buyers who make an HBP withdrawal between Jan. 1, 2022, and Dec. 31, 2025, have five years to start repayment. Previously, the grace period was two years. The repayment period itself hasn’t changed—it’s still 15 years.
April 1, 2024, marked the one-year anniversary of the first home savings account (FHSA), a registered account that gives aspiring home owners $40,000 of additional tax-free savings room to save for a down payment. The FHSA has proven to be highly popular—as of April, more than 750,000 Canadians have opened one, according to the federal government.
“Home ownership is an integral part of most Canadians’ financial goals, and saving and planning are the cornerstones of achieving this dream,” says Mahima Poddar, group head of personal banking at EQ Bank. “The FHSA is an important tool in this journey, and it’s never too late to open one.”
The FHSA contribution limit is $8,000 per year, and you can carry forward up to $8,000 of unused room for one year. By 2028, Canadians who opened an FHSA in 2023 will have the full $40,000 of contribution room.
FHSA contributions are tax-deductible, and FHSA withdrawals are tax-free. Any money you earn inside the account is tax-free, as long as it goes towards buying a home. All of these benefits help buyers reach their savings goal faster.
Bank of Maharashtra (BoM) reported a 47 per cent jump in first quarter net profit at ₹1,293 crore on the back of healthy growth in net interest income and non-interest income and sharp decline in provision for taxes.
The Pune-headquartered public sector bank had reported a net profit of ₹882 crore in the year ago period.
Net interest income (difference between interest earned and interest expended) in the reporting quarter was up about 20 per cent yoy at ₹2,799 crore (₹2,340 crore in the year ago period).
Other income, including fee-based income, treasury income and recovery in written-off accounts, rose 42 per cent yoy to ₹894 crore (₹629 crore).
Provision for Non Performing Assets (NPAs) and Standard/Restructured Assets were up at ₹586 crore (₹539 crore) and ₹344 crore (₹212 crore), respectively. Provision for taxes declined to ₹50 crore (₹205 crore).
Net interest margin (yearly) rose to 3.97 per cent against 3.86 per cent in the year ago period.
GNPAs position improved to 1.85 per cent of gross advances as at June-end 2024 against 1.88 per cent as at March-end 2024. Net NPAs position was unchanged at 0.20 per cent of net advances.
Gross advances increased by 18.99 per cent yoy to ₹2,09,031 crore as at June-end 2024 on the back of 24.70 per cent growth in RAM (retail, agriculture and MSME) advances and 11.01 per cent growth in corporate & other advances.
Total deposits rose by 9.43 per cent yoy to stand at ₹2,67,416 crore as at June-end 2024. Low-cost CASA (current account, savings account) deposits declined to 49.86 per cent of total deposits against 50.97 per cent in the year ago quarter.
Shares of the Bank closed at ₹68.75 per share, up 5.67 per cent over the previous close.
The Wealthsimple Cash card is a prepaid Mastercard available to anyone with a Wealthsimple Cash account. With this card, you can use the funds in your account to make purchases in-store or online. It’s essentially a debit card.
Despite the simplicity, the Wealthsimple Cash card has two significant features. First, you’ll earn 1% back in rewards on all purchases. This cash back can be applied to your account or invested into stocks or crypto through your Wealthsimple self-directed account.
Additionally, the card has no foreign transaction fees. Most traditional credit cards charge a foreign transaction fee of 2.5% when you make a purchase in any currency that’s not Canadian dollars. The Wealthsimple Cash card also waives foreign transaction fees on ATM withdrawals, so having the card is a cheap way to get cash in the local currency when you travel. (You may still be charged a fee by the retailer or financial institutional involved in your transaction, or a fee by the ATM provider.)
Is Wealthsimple Cash safe?
The deposits in your Wealthsimple Cash account are insured for up to $500,000 through the Canada Deposit Insurance Corporation (CDIC). This is five times the amount of CDIC insurance protection typically offered by HISAs in Canada.
This doesn’t mean the money in your Wealthsimple Cash account is held with five separate banks. Instead, it’s backed by five different CDIC member institutions that each provide up to $100,000 in coverage.
Wealthsimple Cash pros and cons
Wealthsimple Cash and the Wealthsimple Cash card are tied together, so you must consider the pros and cons of each before deciding if they suit you.
Wealthsimple Cash pros
High interest rate: You can earn from 4% to 5% interest on your savings.
Strong CDIC protection: Your funds are insured for up to $500,000 via CDIC insurance.
No foreign transaction fees: When using the Wealthsimple Cash card, you won’t pay foreign transaction fees on purchases or ATM withdrawals.
Wealthsimple Cash cons
Potential distractions: Through the account’s rewards scheme, Wealthsimple encourages you to use your savings to invest in riskier assets such as cryptocurrency and stocks.
Not a true credit card: The Wealthsimple Cash card is a prepaid Mastercard, not a credit card. So, you’re limited to what’s in your account (which may not be a bad thing).
Does not build credit: Since it’s a prepaid product, you do not build a credit history with the Wealthsimple Cash card.
Alternatives to Wealthsimple Cash
Wealthsimple Cash’s claim of being Canada’s highest-interest chequing account is accurate, but you shouldn’t immediately dismiss the competition. It’s always best to weigh your options to see what fits you best.
There are a handful of savings accounts offering high interest rates in Canada. But Wealthsimple’s closest competition is EQ Bank’s new Notice Savings Account. With this account, you can earn up to 5% interest on your deposits with no minimum asset requirements and no fees. However, there is a catch. There’s a 10-day or 30-day waiting period to withdraw your funds if you want to earn 4.5% or 5% interest, respectively. EQ Bank does offer a personal account from which you can withdraw your funds at any time, but you’ll only earn up to 4% interest (it includes 2.5% interest by default and another 1.5% if you direct deposit your pay). EQ Bank also offers a no foreign exchange fee prepaid Mastercard that can be used for purchases and ATM withdrawals.
When Bill Cheney led the National Trade Association, policymakers often asked him, “If credit unions are as good a deal as you say, why isn’t everyone a member of a credit union?”
His response was always, “Exactly!”
“If I were the CEO of a bank, my job would be to maximize the value of that bank for the shareholders,” said Cheney, who is now the CEO of SchoolsFirst Federal Credit Union, the largest credit in California for school employees and their families. “We don’t pay dividends to shareholders because we don’t have shareholders; we pay dividends to our members. Our job is to put members first. It’s really an amazing business model.”
As a member-owned, not-for-profit financial cooperative, SchoolsFirst is part of a unique and trusted banking experience 90 years in the making.
Founded on June 12, 1934 during the Great Depression, what was then the Orange County Teachers Credit Union began when 126 school employees pooled $1,200 to establish it. The credit union has grown steadily since.
A 2020 merger with Sacramento-based Schools Financial Credit Union made the state’s largest credit union even bigger. Originally serving Orange County, it now covers the entire state, offering a variety of products and services such as checking and savings, credit cards, home and car loans and retirement planning.
With this expansion, SchoolsFirst’s big challenge is educating younger generations about credit unions while safeguarding its members’ finances against cyberattacks and effectively integrating new technologies.
Southern California News Group spoke to Cheney about SchoolsFirst’s 90 years of serving school employees and their families and what the future might hold. The interview has been edited for space:
Q: Do all credit unions focus on a specific community?
A: Credit unions have what’s called a field of membership. Our field of membership is the educational community and has changed only in the sense that we’ve expanded geographically.
Q: Did that expansion coincide with your recent merger?
A: No, we actually expanded our charter before that.
Schools Financial became part of SchoolsFirst on January 1, 2020, but our systems were integrated toward the end of the year. When we planned the merger, we didn’t plan to send everybody home in the middle of March — hats off to our team for pulling it off.
Q: What impact did the pandemic have on your day-to-day business?
A: We’re an essential business, so we kept all our branches open except those serving colleges, universities and school districts. For example, we closed a small branch at Cal State Fullerton, but our biggest, oldest and busiest branch in Santa Ana stayed open.
We had to move quickly to protect the employees at our branches. But we also sent hundreds of team members home, so we had to make arrangements for them to work from home.
That first week, I reassured our team — and the rest of our leadership team did as well — that everybody’s job was protected regardless of their role in the organization and that our members needed us now more than ever.
Q: And how did you reassure your members?
A: We have an emergency loan program for use if, for example, there’s a state government shutdown and people’s pay is delayed. It hasn’t happened for a while, but it has happened. And so, we had this program in place (during Covid-19).
The government stepped in and provided stimulus payments, so we didn’t have to utilize (the program) too much. But some of our members did lose their jobs and that emergency loan program helped them through that interim period until the government stimulus kicked in.
But the big challenge credit unions face is educating younger generations about their value, mission, and purpose because it’s not always clear. Even some of our members refer to us as their bank. We are in the banking business, but we are not a bank. We’re a credit union; we’re a mutual.
We have board members like a bank, but our board members are elected by our members to serve as volunteers to run this $30 billion financial institution. They represent our members’ interests, and that builds trust.
Q: Can we talk about services? For example, there is immense pressure in California to own and finance a home. How is SchoolsFirst working to make these loans happen for your members, and how much of the business does it represent?
A: People are challenged by higher interest rates and higher prices. Higher interest rates are good for our members who save, but if you’re a borrower, it’s challenging. You used to be able to get a mortgage for 3%, and now they’re close to 7% and higher. That’s a big difference on a home payment in a high-priced market like California.
Real estate is a huge part of our business—not as much as it was when rates were lower, but we do make a lot of mortgage loans and home equity loans. Most of our real estate team is in Tustin, although we also have operation centers in Riverside and Sacramento.
With first mortgage lending, we do have some flexibility, but the rates are pretty much set by the secondary market. Our rates are competitive, but the difference may not be as much on the real estate side, just because of the way the market works.
What’s different are the fees and the terms of the loans. For instance, we have a special school employee mortgage with a low down payment and no private mortgage insurance requirement. By not requiring them to have that, we’re able to lower their monthly cost quite dramatically.
Q: Do you ever bundle and sell loans?
A: It does happen occasionally, but when we sell a loan, we retain the servicing. The member still comes through us for everything.
Q: Why do you think SchoolsFirst has managed to grow when smaller credit unions have folded or been absorbed?
A: We’ve expanded geographically, and we’ve certainly changed a lot in the products and services that we offer over the 90 years. I actually started on the 80th year of the credit union, coincidentally, and we’ve seen a lot of growth in that time period. But really, since our beginning, we’ve stayed focused on school employees and their families with, as we say in our mission statement, world-class personal service.
Q: What does the future look like for SchoolsFirst?
A: Things are now changing faster than ever, and our member’s needs are changing. Cybersecurity is a huge deal. We have a great team here that protects our system and our servers. And, of course, you can’t open a newspaper or turn on a program without hearing about AI.
In some respects, we’ve been using artificial intelligence in our business for a long time, but it isn’t the same as people. If a member calls with a question, for example, we have an internal pilot that uses AI to help our team quickly find the answer by going through thousands of pages of standard operating procedures. But a person always answers the member’s question.
Continuing to focus on our members and anticipate their needs and look out for their financial wellbeing—it’s what got us to this point. And that’s what is going to make us successful in the future.
Q: Will you continue to expand geographically?
A: Yes. We are expanding geographically in several ways. We provide a wholly-owned subsidiary organization that provides third-party administration services to more than 300 school districts and county offices. That’s expanding statewide as far north as Nevada County.
We also work with a third party to help us understand where our members are and where there’s potential for growth in terms of our future expansion. We typically add two or three branches a year, so it’s not rapid growth; it’s controlled. Even if people never go into a branch, they like to know that there is one convenient to them in case they need it.
Bill Cheney is the CEO of SchoolsFirst Federal Credit Union. (Photo by Paul Bersebach, Orange County Register/SCNG)
Bill Cheney is the CEO of SchoolsFirst Federal Credit Union. (Photo by Paul Bersebach, Orange County Register/SCNG)
Bill Cheney is the CEO of SchoolsFirst Federal Credit Union. (Photo by Paul Bersebach, Orange County Register/SCNG)
Bill Cheney
Title: CEO
Organization: SchoolsFirst Federal Credit Union has more than 30 billion in assets and serves 1.4 million school employees and their families. It has 69 branches and more than 300 ATMs statewide. Members can also access a cooperative of thousands of free ATMs there and nationwide.
When he first joined a credit union: “My initial introduction to credit unions was (at the McCombs School of Business at the University of Texas at Austin),” he said. “I worked for the State Property Tax Board and joined the Public Employees Credit Union in Austin, Texas, in the early ’80s.”
How he ended up working for credit unions: After graduating from college, Cheney spent five years at what was then Andersen Consulting.
“One of my clients was the Security Service Federal Credit Union in San Antonio, Texas,” he said. “I worked there off and on different consulting assignments, mostly having to do with technology. In 1987, I was offered an opportunity to work for the Security Service. That was my first credit union job.”
Moving around the credit union world: Cheney moved his family to California in 1997, where he spent nine years as CEO of what was then Xerox Federal Credit Union in El Segundo and another four years as CEO of the California and Nevada Credit Union Leagues. He also spent four years as CEO of the Credit Union National Association in Washington, D.C.
In 2014, Cheney returned to California and settled in Orange County as CEO of SchoolsFirst Federal Credit Union.
The bank said Thursday it will now pay a quarterly dividend of $1.42 per share, an increase of four cents. It also said it plans to buy back up to 30 million of its shares.
The moves came as RBC said it earned $3.95 billion or $2.74 per diluted share for the quarter ended April 30, up from $3.68 billion or $2.60 per diluted share a year earlier, helped in part by record capital markets revenue.
“This quarter, we saw strong growth across diversified revenue streams,” said chief executive Dave McKay on an earnings call.
He said the bank’s capital generation means it has options ahead for growth, including potential acquisitions, even as the bank returns more money to shareholders.
“This enormous capital that we are generating gives us significant strategic flexibility inorganically.”
The bank also has a wide range of growth options within the bank now, including making the most of its $13.5-billion HSBC Canada acquisition.
End of uncertainty for former HSBC employees
The roughly 4,500 employees RBC took on with the acquisition are now free from the uncertainty around the deal, and the barriers it posed to bringing on clients, he said.
“They’ve been on the defence for 18 months, and now we’re on the offence and you can see the excitement in their eyes to get back,” said McKay.
Editor’s note:The share of the U.S. population older than 65 keeps rising – and will for decades to come. Since nearly half of Americans over 65 will pay for some version of long-term health care, CNHI News and The Associated Press examined the state of long-term care in the series High Cost of Long-Term Care, which began Friday and continues this week.
While many Americans will need long-term care as they get older, few are prepared to pay for it.
Medicare, which provides Americans over the age 65 with health insurance, doesn’t cover most long-term care services. And Medicaid — the primary safety net for long-term care coverage — only covers those who are indigent.
Federal estimates suggest 70% of people ages 65 and older will need long-term care before they die, but only 3% to 4% of Americans age 50 and older are paying for long-term care policies, according to insurance industry figures.
The high cost of premiums for those private long-term care policies puts it out of reach for most people.
Even some who have this kind of insurance find it doesn’t provide enough to cover the costs of home health aides, assisted-living facilities or nursing homes.
“People think that long-term care insurance is for everyone — but it is not,” said Jessie Slone, executive director of the American Association for Long-term Care Insurance, an advocacy group. “It’s for a very small subset of individuals who plan, and have some retirement assets and income they can use to pay for it.”
To qualify, applicants need to pass a health review. Slone said insurance companies have underwriting policies with “page after page” of conditions that will disqualify people from getting that coverage.”If you live a long life, the chances of you needing care are significant. So then the issue becomes who’s going to provide for that care, and who’s going to pay for it. For some, long-term care insurance is an option.”
Prices vary, based on the age when people apply, how good their health is at the time, and how much coverage they want. “You have to start looking at this generally in your 50s or 60s,” Slone said. “Because, as you get older, you’re going to have conditions which insurers are going to look at, determine that you’re very likely to need long-term care and not give you a policy.”
That coverage, if you can get it, doesn’t come cheap: In 2023, the annual average cost for a policy for a couple both age 55, taking out a $165,000 initial pool growing at 3% compounded annually — ranged from a low of $5,018 to $14,695 a year, according to the association.
But, compared to auto insurance — which most people may never use — long-term care insurance is a good investment for those who can afford it, Slone said. “Car insurance is the most expensive insurance you ever pay because the chances of you getting into a car accident are somewhat remote. But the chances of someone needing long-term care if they make it to 90 are pretty significant.”
Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care, a national nonprofit advocacy group, views it differently. She said the private long-term care insurance system has become a “bust” amid rising premiums and difficulties accessing benefits.
Consider the fact that the number of companies offering long-term care insurance is declining, while payouts are steadily increasing as the baby boomer generation ages.”Most people have found it very expensive,” Smetanka said. “But, at the same time, people are finding that it wasn’t covering what they needed.”
Last year, insurers paid a record of more than $14 billion to cover an estimated 353,000 long-term care claims, according to industry figures. That’s compared to about $11.6 billion just three years ago.
Currently, there are about 7.5 million people in the U.S. age 65 and older with private long-term care insurance, according to industry data.
With that incentive, some states, including Washington and California, are looking at creating long-term care social insurance pools funded by payroll taxes and other sources of funding. The effort also is being spurred, in part, by the rising costs borne by states for Medicaid long-term care coverage, which they share with the federal government.
“More and more states are coming to the conclusion that this is an under-funded system,” said Marc Cohen, a researcher and co-director of the LeadingAge LTSS Center at the University of Massachusetts at Boston. “There are simply not enough dollars going into the system – given the needs and the demands of the growing elderly population.”
So far, Washington is the only state to try to address the issue. A law approved by the state Legislature in 2019 created a long-term care benefit program, which provides residents with up to $36,500 to pay for costs such as caregiving, wheelchair ramps, meal deliveries and nursing home fees.
The Cares Funds is covered by a payroll tax that deducts 0.58% out of paychecks but guarantees a $36,500 lifetime benefit for those who have paid into the fund for 10 years.
Several other states are studying the issue. In California, a task force is looking at how to design a long-term care program, according to the National Conference of State Legislatures. Massachusetts, Illinois and Michigan also are weighing the costs versus benefits of creating a state long-term care benefits program.
But the issue of imposing new taxes to pay for long-term care insurance is controversial — and politically unpopular — on both a state and federal level.
Washington’s long-term care insurance law is facing a repeal effort from a group backed by hedge fund executive Brian Heywood that argues the system should be voluntary. Voters in November will decide whether to allow people to opt out, which supporters say would essentially gut the program.
“There are a lot of states that are looking to see what happens in Washington,” Cohen said. “If this billionaire who is funding this repeal effort wins, it will be a real blow.”
Cohen said efforts on a federal level to create a publicly funded insurance pool haven’t gained much traction. A long-term care program created by Congress through the CLASS Plan, which was tied to the Affordable Care Act, was voluntary. That law was repealed in early 2013.
“It never got off the ground before it was repealed,” he said. “With the dysfunction in Congress, we’re likely to see more action on a state level than the federal.”
Recent polls suggest there may be some public support for the move. A survey by the National Council on Aging found more than 90% of the 1,000 female respondents across party lines support the idea of creating a government program to pay for the cost of long-term care.
“The level of support was significant, and very bipartisan,” said Howard Bedlin, a long-term care expert with the council. “People keep talking about how Congress can’t find bipartisan support. Well, the voters clearly support it.
“The politicians just aren’t giving these issues the attention they deserve.”
Christian M. Wade is a reporter for North of Boston Media Group.
Owners of small- and medium-sized businesses check their bank balances daily to make financial decisions. But it’s enterpreneur Yoseph West’s assertion that there’s typically information and functions missing from bank accounts that owners could really use.
“SMBs make up 44% of U.S. GDP, underpin the economy and have a deep impact on all of us,” West said in an interview with TechCrunch. “And yet most SMBs only have enough cash on hand to last 27 days. They need greater cash flow clarity and control in their banking.”
West, who studied equity and debt finance in college, co-founded Vuru, a stock market research app, in 2012. After fintech firm Wave Accounting acquired Vuru later that year, West stayed on, eventually graduating to the role of director of product engagement.
While at Wave, West had the idea for his next company: Relay, a business banking and money management service for SMBs. West teamed up with Paul Klicnik, an ex-IBM engineer who previously developed the core technical infrastructure at coupon app Flipp, to launch Relay in October 2018.
“Relay is an online business banking and money management platform designed to help small businesses take control of their cash flow,” West explained. “The platform is focused on delivering true cash-flow clarity to SMBs.”
Relay’s platform lets SMBs organize their income, expenses and reserves across up to 20 checking accounts. (Relay isn’t a bank itself; the company relies on its partner Thread Bank for the banking services it provides, which West says are FDIC-insured.) Through Relay, a company can automatically set aside cash into savings accounts with 1%-3% APY and issue up to 50 physical or virtual Visa debit cards to employees.
Relay users can send and receive ACH transfers, wires, and check payments like they would with traditional banks. And they can capture and store receipts, allowing people in their employ access through role-based accounts.
The company makes money through interest on customer deposits, card interchange fees and a $30 per month premium service (Relay Pro) that adds features like same-day payments, and competes with neobanks such as Bluevine and Mercury. But West argues that Relay is one of the few of its kind not focused on tech startup or individual business owner customers.
“Relay is built for the 33-million-plus SMBs in the U.S. and their in-house or outsourced finance functions,” he said. “We primarily serve ‘heart of America’ small businesses that have 2-plus employees — full-time, part-time or contracted — and make $20,00 to $200,000 in monthly revenue.”
Image Credits: Relay
This has proven to be a winning strategy.
West predicts that Relay will reach $100 million in annualized revenue by the second half of this year. Revenues rose 3x in 2022 — and close to 6x in 2023 — thanks to a robust client base that now stands at ~100,000 businesses.
That’s all the more impressive considering the state of the fintech industry.
Last year, venture investment in financial services and fintech fell to $43 billion, its lowest level in six years and down more than 50% year-over-year from the $89.5 billion invested in 2022, according to CrunchBase. The austere funding environment contributed to the collapse of fintechs such as Synapse, the banking-as-a-service startup whose bankruptcy has impacted the finances of millions of customers.
To help lay the groundwork for expansion into new spaces including spend management, crediting and financial APIs, Relay this week closed a $24 million Series B round led by Bain Capital Ventures with participation from BTV, Garage, Industry Ventures, and Tapestry. The new cash bring the startup’s total raised to $51.6 million.
“We chose to raise because of our growth rate,” West said. “To truly get predictive cash flow analytics, SMBs need a unified view of the inflows and outflows of cash across their back office. Relay is building towards that vision … In the future, the platform will make smart recommendations to small businesses based on what is happening in their entire back office.”
Relay, which is based in Toronto, plans to grow its workforce from 140 people to 200 by the end of the year.
