The lowdown on high rates
The troubles at Home Capital are a reminder that the alternative banks, trust companies and credit unions offering premium interest rates may not be as stable as the big banks. Here's a rundown on a selected group of alternative players that are widely available to Canadians.
| Financial Institution | Savings Rate (%) | One-Year GIC Rate (%) | Five-Year GIC Rate (%) | Deposit Insurance Provider | Quick Profile |
|---|---|---|---|---|---|
| AcceleRate Financial | 1.7 | 1.85 | 2.45 | Deposit Guarantee Corp. of Manitoba | A division of Crosstown Civic Credit Union in Manitoba |
| Achieva Financial | 1.7 | 1.85 | 2.35 | DGCM | A division of Cambrian Credit Union in Manitoba |
| Alterna Bank | 1.9 | 1.5 | 1.9 | Canada Deposit Insurance Corp. (listed as CS Alterna Bank) | A subsidiary of Alterna Savings and Credit Union in Ontario |
| Canadian Tire Bank | 1.3 | 1.1 | 2.5 | CDIC | A division of Canadian Tire Corp. |
| EQ Bank | 2.3 | n/a | n/a | CDIC | Part of Equitable Bank, an alternative mortgage lender |
| Home Bank | 1 | 1.65 | 2.2 | CDIC | A subsidiary of Home Trust, which in turn part of alternative mortgage lender Home Capital |
| Home Trust | 1 | 1.6 | 2.15 | CDIC | A subsidiary of Home Capital |
| Hubert Financial | 1.7 | 1.95* | 2.4 | DGCM | A division of Sunova Credit Union in Manitoba |
| MAXA Financial | 1.7 | 1.85 | 2.35 | DGCM | A division of Westoba Credit Union in Manitoba |
| Motive Financial | 1.5 | 1.53 | 2.25 | CDIC | Owned by Canadian Western Bank, which has been active in alternative mortgage lending |
| Oaken Financial | 1.75 | 2 | 2.5 | CDIC (through Home Bank and Home Trust) | Home Trust is the parent company, but Oaken is a trademark of Home Bank; both are part of the Home Capital corporate family |
| Outlook Financial | 1.7 | 1.85 | 2.35 | DGCM | A division of Assiniboine Credit Union in Manitoba |
| Peoples Trust | 1.45 | 1.85 | 2.25 | CDIC | A Vancouver-based trust company and mortgage lender |
| President's Choice Financial | 0.8 | 1.4 | 2 | CDIC | Jointly run by Canadian Imperial Bank of Commerce and Loblaw Cos., the supermarket chain |
| Tangerine | 0.8 | 1.3 | 2 | CDIC | Owned by Bank of Nova Scotia |
| Zag Bank | 1.65 | 1.2 | 2 | CDIC | Owned by Desjardins Group, the Quebec-based financial services giant |
*Quarterly term with a 1.95 per cent average annual rate / Notes: Interest rates are accurate to the morning of May 10 and are subject to change; GIC rates are quoted for non-registered, annual compound deposits; rates for registered deposits and GICs that pay monthly or semi-annually may differ.
Deposit Insurance Comparison
Here's how coverage from CDIC compares to the Deposit Guarantee Corp. of Manitoba, which backs a wide variety of savings accounts offered nationally by divisions of Manitoba-based credit unions. Credit unions elsewhere typically serve local clients and have deposit insurance through plans for their province.
| Coverage Limit | Principal and Interest Included in Coverage | Government-Backed | GIC Terms Covered | Deposits in Foreign Currencies Covered | Coverage Applies to Customers Across Canada | |
|---|---|---|---|---|---|---|
| Canada Deposit Insurance Corp. | $100,000 per insured category* | Yes | Yes - CDIC is a federal crown corporation | Five years and less | No | Yes |
| Deposit Guarantee Corp. of Manitoba | The guarantee is unlimited | Yes | No - the Manitoba government is not legislatively required to support the DGCM financially | No limit | Yes | Yes |
*Seven categories, including deposits held in one name and held in more than one name; also, RRSP, RRIF and TFSA deposits / Sources: Banks, credit union websites, Cannex.com, CDIC, DGCM