Motive Financial Review – Canada’s Best High Interest Savings Account?

Motive Financial is the online banking arm of Canadian Western Bank, which is a Schedule I bank. As with other online only banks, such as Tangerine or EQ, Motive has become popular with Canadians who appreciate the low fees an higher interest that they are able to offer. But how does Motive measure up in the online space against other, more well known brands? To find out, I decided that the time was right for a Motive Financial review.

Introducing Motive Financial

It may surprise you that Motive Financial has been around as far back as 2008, when Canadian Western Bank launched their online bank under the name Canadian Direct Financial. In 2017, they underwent a rebrand, and emerged with a new name, Motive Financial. Fast forward to 2020, and Motive offers no fewer than 2 chequing and savings accounts, as well as TFSA, RRSP and non-registered investment options. Let’s take a closer look at the Motive Financial product lineup, starting with their chequing accounts.

Opening a Motive Account

Motive makes opening a bank account fast and easy. To get started, simply head to their website and follow the instructions. You will need to provide them with some information up front, including your personal details, employment information etc. From there you can choose the account(s) you wish to open. If you want to open a Motive Financial TFSA or RRSP account, there is some additional paperwork that needs to be printed, filled out, and sent back to Motive by mail.

Motive Financial Mobile App

Any online bank worth its salt needs to offer a top notch online banking experience. Motive Financial achieves this with their mobile app, which can be downloaded for use on both iPhone and Android devices. With the app, you can easily check your balances and transaction history, pay bills, transfer between Motive accounts, or send e-Transfers. The app also gives you access to a series of financial calculators, to assist you in your decision making.

Motive Financial Chequing Account

With Motive, there are 2 different chequing accounts to choose from. Both accounts are similar, with no monthly fees, unlimited transactions, and free e-Transfers, however one charges you a fee when you use a non-network ATM in exchange for a higher daily interest rate:

Motive Chequing Account:

• No monthly fee
• Unlimited transactions
• Daily interest rate of .60% on any balance
• Free e-Transfers
• First cheque order is free (quantity of 50)
• Free withdrawals at Exchange network ATMs
• $1.50 fee for non-Exchange network ATM withdrawals

Motive Cha-Ching Chequing Account:

• No monthly fee
• Unlimited transactions
• Daily interest rate of .25% on any balance
• Free e-Transfers
• First cheque order is free (quantity of 50)
• 2 FREE withdrawals at non-Exchange network ATMs (each additional withdrawal is $1.50)

Motive Financial Savings Account

As with their chequing account lineup, Motive Bank offers two savings accounts. One is designed for more frequent use while their high interest savings account offers an attractive interest rate, but limits how often you can make withdrawals for free.

Motive Savings Account:

• No monthly fee
• Unlimited free withdrawals
• Free transfers between Motive accounts
• 1.25% interest on balances between $0-$5,000,000
• 1.75% interest on balances over $5,000,000
• free e-Transfers
• Free withdrawals at Exchange network ATMs
• $1.50 fee for non-Exchange network ATM withdrawals

Motive Savvy Savings Account:

• 2.05% interest
• No monthly fee
• 2 free monthly withdrawals
• Additional withdrawals are $5.00
• Free transfers between Motive accounts
• Free withdrawals at Exchange network ATMs
• $1.50 fee for non-Exchange network ATM withdrawals
• e-Transfers are $1.00

Most accountholders would be better off with the Motive Financial Savvy Savings account, as long as you can avoid making more than 2 withdrawals per month. This is easy if you have a Motive chequing account, as transfers between Motive accounts are free. So, go for the 2.05% interest with Savvy, and use the chequing account for all of your spending.

Motive Financial Investments

In addition to day to day banking, Motive Financial makes it easy for customers to invest, by making TFSA, RRSP, and non-registered accounts available. I should, however, make it clear that if you’re looking for a long term investment solution, such as mutual funds, ETFs, or the ability to trade stocks, you won’t find that here. Motive sticks to what they know best: savings accounts, as well as Guaranteed Investment Certificates (GICs). These are ideal for the most risk averse investor, or someone looking for a place to park money for the short term.

Motive Financial GICs

Motive Financial offers GIC terms from 1 to 5 years, and from what I can see, the rates are the same, regardless of the registration type ie. TFSA, RRSP, non-registered. The minimum investment amount for a GIC is $500 in an RRSP, and $1000 for both TFSA and non-registered options. Interest is compounded annually and paid at maturity. Because Motive Financial is part of Canadian Western Bank, all deposits are protected through CDIC. Below is a list of current rates:

Term Rate

12 months 1.60%

24 months 1.80%

36 months 1.90%

48 months 2.00%

60 months 2.15%

Motive TFSAs

Invest tax free with a Motive Financial TFSA savings account or GIC. The savings account offers the same 2.05% interest rate as the Motive Savvy Savings, but with unlimited, free withdrawals. There is no monthly fee. As with any TFSA product, you need to make sure you stay within the annual and lifetime contribution limits.

Motive RRSPs

Similar to the Motive Financial TFSA offering, you can open an RRSP savings or GIC account. While the GIC rates are the same across the board, the RRSP savings account interest is not as high. You’ll earn .25% on balances between $0 and $2,500, and 1.25% on amounts over $2,500. That said, you shouldn’t be using a savings account for long term investments, such as retirement savings. It is perfectly fine to park funds here for the short term, however.

Motive Financial Rates

You may be wondering how the Motive interest rates compare with offerings from other online banks. Rather than sending you in a thousand different directions to find out, I’ve compiled a list of the current savings account interest rates available today. Keep in mind that these rates can change at anytime without notice.

Institution Best Savings Rate

Motive Financial 2.15%

EQ Bank 2.00%

Tangerine 2.50% (for 5 months, new customers only)

Simplii Financial 0.30%

Oaken Financial 1.65%

Alterna Bank 1.69%

Wealthsimple Cash 0.90%

Final Thoughts on Motive Financial

There you have it, my Motive Financial review for 2020. When I set out to write this review, I was wanting to see how Motive stacked up against other online banks. In short, I’m quite impressed with their product offering, especially when it comes to their day to day banking lineup.

If you’re looking for a high interest savings account with an online bank, you should definitely put Motive Financial on your shortlist. Their interest rates compare favourably against most, if not all, of their competition. Not only that, they boast a rock solid mobile app and no-fee banking with unlimited transactions.

If you’re looking to invest inside a TFSA or RRSP online, you may be better off looking elsewhere, such as Tangerine or Wealthsimple. This isn’t a knock against Motive, as their savings and GIC rates are more than respectable. It’s just that those other institutions have more to offer when it comes to long term investing options, namely the low-fee Tangerine Investment Funds, and Wealthsimple’s low cost robo advisor ETF portfolios.