Wealthsimple: A Comprehensive Review of Banking and Investment Products

Wealthsimple is a prominent Canadian investment service known for its innovative and user-friendly platform. In addition to its no-commission trading platform, Wealthsimple has expanded its offerings to include a range of banking products. This article provides an in-depth review of Wealthsimple’s banking and investment options, comparing them to other online-only and traditional brick-and-mortar banks.

Introduction to Wealthsimple Accounts

Wealthsimple offers various types of accounts tailored to individual, joint, and business needs. The primary accounts include chequing accounts, savings accounts, and self-directed/managed investment accounts. Let’s explore each of these in detail.

Chequing Accounts

Wealthsimple’s chequing account, known as the Cash account, stands out for its tiered interest system. With no minimum balance required, customers earn 4% interest on their deposits. If the balance exceeds $100,000, the interest rate increases to 4.5%, and for balances over $500,000, customers enjoy a 5% interest rate. The Cash account has no fees, overdraft penalties, and allows for daily transfers of up to $5,000 with Interac e-Transfer. Additionally, customers receive a Wealthsimple Cash card (a prepaid credit card) that offers 1% cashback in the form of cash to invest or cryptocurrency.

Savings Accounts

Wealthsimple offers a range of savings accounts for both individuals and businesses. The Wealthsimple Save account is a standard savings account with a fixed interest rate of 1.5% and no fees. It can also be opened as a joint account for shared finances. Businesses can benefit from the Business Save account, which offers a competitive interest rate of 1.1% with no minimum balance requirement or fees. Additionally, businesses have the option to invest in a customized low-fee portfolio of exchange-traded funds (ETFs) through the Business Invest account.

Self-Directed and Managed Investment Accounts

Wealthsimple provides a wide array of self-directed and managed investment accounts, catering to different investment goals and preferences. Registered savings accounts like TFSAs (Tax-Free Savings Accounts) and RRSPs (Registered Retirement Savings Plans) can be self-directed or managed by Wealthsimple. On the other hand, spousal RRSPs, RESPs (Registered Education Savings Plans), and LIRAs (Locked-In Retirement Accounts) are available exclusively as managed investment accounts. Managed accounts come with management fees ranging from 0.40% to 0.50%, depending on the total assets.

Guaranteed Investment Certificates (GICs)

Currently, Wealthsimple does not offer guaranteed investment certificates (GICs). However, the platform provides a range of other banking and investment products to meet various financial needs.

Additional Wealthsimple Bank Products

In addition to their core banking and investment offerings, Wealthsimple provides several other products and services:

  1. Wealthsimple Cash Card: Customers receive a prepaid credit card that offers 1% cashback, which can be used to invest or purchase cryptocurrency.
  2. Unique Cash Handle: The Wealthsimple app features a unique cash handle for easy cash transfers within the platform.
  3. Crypto Trading Account Options: Wealthsimple offers crypto trading accounts, allowing customers to invest in cryptocurrencies.
  4. Group RRSPs for Employees: Businesses can set up group RRSPs for their employees through Wealthsimple.
  5. Private Credit Investing: Customers with over $100,000 invested in Wealthsimple can access private credit investing opportunities.

Access on the Go

As an online-only institution, Wealthsimple provides a range of digital features for convenient account access and management. Customers can access their accounts and seek support through the app or the web. The Wealthsimple app offers various functions, including account history review, recurring investment editing, cash digital card payment, fund deposit, transfer, and investment across different accounts, account opening, investment exploration, and portfolio activity tracking.

Wealthsimple vs. Competitors

To understand how Wealthsimple’s banking products compare to other online-only and traditional banks, let’s examine its offerings against some popular competitors.

Wealthsimple vs. EQ Bank

Both Wealthsimple and EQ Bank offer no fees and a similar range of products. However, EQ Bank outperforms Wealthsimple in terms of GICs and high-interest savings accounts. On the other hand, Wealthsimple’s Cash account, when combined with direct deposit, outperforms EQ Bank’s 2.5% interest rate. While EQ Bank offers a prepaid card with no ATM fees, 0.5% cashback, and 2.5% interest on balances, Wealthsimple’s Cash card offers 1% cashback with standard ATM fees.

Wealthsimple vs. Simplii Financial

Simplii Financial, a division of CIBC, matches Wealthsimple’s no-fee structure but falls behind in terms of interest rates. Simplii’s chequing account offers a maximum interest rate of 0.10%, significantly lower than Wealthsimple’s 1.0% rate. Even Simplii’s savings account reaches 1.5% interest only for customers with balances over $500,000. However, Simplii offers a broader range of features, including credit cards, mortgages, lines of credit, mutual funds, and various account types, which Wealthsimple does not provide.

Wealthsimple vs. Tangerine

Compared to Tangerine’s core chequing account, Wealthsimple offers a better interest rate. Tangerine’s No-Fee Daily account provides a maximum interest rate of 0.10%, while Wealthsimple’s Cash account offers 1.0% interest. Tangerine’s savings accounts also fall slightly behind Wealthsimple’s, with an interest rate of 1.0%. However, Tangerine’s TFSA and RSP accounts accrue interest at the same rate, while Wealthsimple’s registered accounts are primarily used for investing. Wealthsimple also has lower investment fees compared to Tangerine’s ETF portfolios.

Methodology for Ranking Banks

To create this comprehensive review, Forbes Advisor compared 46 nationally available banks, including both traditional brick-and-mortar institutions and online-only banks. The evaluation criteria included product offerings, APY (Annual Percentage Yield), fees, minimum deposit and balance requirements, availability, third-party ratings, customer reviews, live chat support, digital experience, and ATM network. Based on these factors, banks were rated out of five stars to determine the best options available.

Is Wealthsimple Right for You?

Whether Wealthsimple is the right choice for you depends on your specific banking and investment needs. If you frequently use Wealthsimple’s products, such as their investment accounts, you can benefit from their banking options. Customers who deposit over $100,000 on the platform enjoy lower investment management fees and higher interest rates. However, if you prefer to have all your banking needs met in one place or require additional banking products like GICs, lines of credit, or mortgages, other institutions may be better suited to your needs.

Frequently Asked Questions (FAQs)

Is Wealthsimple CDIC insured?

While Wealthsimple is technically not a bank and cannot be CDIC insured, they have partnered with CDIC federally-regulated Canadian Financial Institutions. This partnership allows for CDIC coverage on Wealthsimple’s cash account, providing protection for funds up to $300,000.

Can I use Wealthsimple as a bank?

Wealthsimple offers chequing and savings accounts, making it possible to use their platform for everyday banking needs. Although unconventional, Wealthsimple provides similar perks and services to traditional banks. However, it is important to note that Wealthsimple is not a financial lending institution.

Is it safe to save money with Wealthsimple?

Yes, it is safe to save money with Wealthsimple. All funds deposited into Wealthsimple accounts are held in trust by CDIC members, ensuring protection for funds up to $300,000 in aggregate.

Does Wealthsimple have a monthly fee?

Wealthsimple does not charge any monthly fees. Customers can enjoy the benefits of Wealthsimple’s banking and investment products without incurring any regular charges.

Who can bank with Wealthsimple?

Wealthsimple is available to Canadian residents, as long as they meet the legal age requirements in their jurisdiction. Whether you are an individual, a couple, or a business, Wealthsimple has account options to suit your needs.

In conclusion, Wealthsimple offers a range of innovative banking and investment products, making it a competitive player in the Canadian financial market. While Wealthsimple may not offer every banking product available, its user-friendly platform, attractive interest rates, and no-fee structure make it an appealing choice for individuals and businesses alike. Consider your specific banking and investment needs to determine if Wealthsimple is the right fit for you.


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