There is yet another entrant in the already crowded online savings accounts marketplace. A tiny Manitoba-based credit union has started offering online savings accounts, term deposits, TFSA savings account and TFSA term deposits under the Hubert brand through the website happysavings.ca. The savings account offers an interest rate of 2.25 percent and the 2- to 5-year term deposits yield an average of 3.075 percent. Though the interest rate on the savings account is one of the highest available, it is largely negated by a $2.50 service charge per withdrawal from the savings account. Just like competing online accounts offered by credit unions, Hubert accounts are not CDIC-insured and deposit insurance is provided by the Credit Union Deposit Guarantee Corporation. New customers are required to purchase a $5 member share.
Hubert joins two other online savings accounts currently offered by credit unions: Outlook Financial and Achieva Financial. Outlook Financial offers a 2.0 percent interest on a savings account and 2- to 5-year GICs that provide an average yield of 3.11 percent. RRSP, RRIF and TFSA accounts are also available from Outlook Financial but watch out for the fees. One free withdrawal can be made from a savings account every month but each subsequent debit transaction is charged a fee of $1. A fee of $50 is charged for RRSP / TFSA transfers to another institution.
Achieva Financial currently offers a 2.0 percent interest on a savings account and 2- to 5-year GICs are yielding an average of 3.09 percent. RRSP, RRIF and TFSA accounts are available but again watch out for those fees. The first debit transaction is free but each subsequent debit is charged a fee of $1. Online bill payments from the account are charged a fee of $0.50.
Online savings accounts from credit unions do seem to offer a smidgen more interest on savings accounts and GICs than most of their competitors. But, other online products such as those from ING Direct and Ally make up the difference by providing a CDIC guarantee and not charging any fees. Also note that you can park cash in your brokerage accounts in high interest savings accounts that can be purchased like mutual funds.
