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motusbank Review: A New Option in Online Banking

motusbank Review: A New Option in Online Banking

In recent years, names like Tangerine, Simplii, and EQ Bank have become synonymous with digital banking in Canada. Pretty soon, it looks as though another name may be added to the list. Launched in April 2019, it hasn’t taken very long for motusbank to make its mark in the world of online banking. A subsidiary of Ontario-based Meridian Credit Union, motusbank is a full-service digital bank already boasting a wide range of financial products and services for Canadians. In fact, the only province where motusbank isn’t yet doing business is Quebec.

motusbank Product Offering

Almost all of your banking needs can be served by motusbank. Like much of their competition, they offer a no-fee chequing account, a high-interest savings account, and GIC investment products. You can also apply for a mortgage, personal loan, or line of credit with motusbank. You can even get a student line of credit. Applications for these products are completed online, from the comfort of your living room. No need to make the trek into a brick and mortar bank branch. Let’s review each of these products in more detail.

motusbank No-Fee Chequing Account

Similar to other online banks, motusbank offers a no-fee chequing account that will also earn you .50% interest, a respectable rate for a chequing account. There is no minimum balance requirement to qualify for the interest rate. In addition, you’ll receive free, unlimited e-transfers with your motusbank chequing account, as well as ATM access at any machine linked to the EXCHANGE network. That’s over 3,500 ATMs across Canada. A motusbank chequing account also comes with 25 free cheques, and the ability to make mobile deposits.

Features:

  • No monthly fees
  • Free, unlimited e-transfers via Interac
  • Mobile cheque deposit capability
  • First cheque order is free (25 cheques)
  • No minimum balance required
  • Deposits are insured by CDIC (up to $100,000)
  • Unlimited transactions, including bill payments
  • Free access to more than 3,700 ATMs throughout Canada

motusbank Savings Accounts

There is no shortage of Canadian banks offering high-interest savings accounts. The motusbank high-interest savings account is competitive with offers from EQ Bank, and Tangerine. At the time of this writing, you’ll receive 2.25% on a regular non registered, or RRSP savings account. TFSA savings accounts are even higher, at 2.50%. This edges out Tangerine’s regular interest rate, although Tangerine does have a limited time, introductory rate of 2.75%). You’ll get unlimited debits and withdrawals with a motusbank savings account, and the comfort of knowing deposit balances are protected up to $100,000, by CDIC (Canada Deposit Insurance Corporation).

Features:

  • Interest rates as high as 2.5% (TFSA)
  • No monthly fees on all savings accounts
  • Unlimited point of sale transactions and account withdrawals
  • Free access to more than 3,700 ATMs throughout Canada
  • Deposits are insured by CDIC (up to $100,000)

Investing With motusbank

The motusbank investment product offering is somewhat limited. Beyond their attractive interest rates on RRSP and TFSA savings accounts, there’s little to offer. For example, you cannot purchase mutual funds, ETFs, or individual stocks through motusbank. If you’re looking for long term investment options, and prefer to bank online, I would recommend companies like Wealthsimple, or Questrade.

Motusbank GICs

For safety investors, motusbank offers a full lineup of GIC products, with interest rates that are superior to anything you’d find at the Big Six banks. Currently, rates range anywhere from 2.8% for a 1 year GIC, to 3.25% if you decide to lock in for 5 years. You can get an 18-month GIC for 2.85%, a very attractive rate.

In summary, long term investors are going to want to look elsewhere to make their TFSA or RRSP contributions, but shorter term, more conservative investors will appreciate the high-interest rates offered by motusbank GICs and high-interest savings accounts.

motusbank Mortgages

For many Canadians, obtaining a mortgage can be a stressful experience. After all, with so many features to choose from these days, picking the right mortgage can be tough. With motusbank, you can complete the entire application process online, and anytime you need to ask questions, a motusbank advisor is only a phone call away. What I like is that motusbank offers a number of mortgage resources right on their website. You’ll find mortgage calculators and several articles that explain the basics of financing a home.

motusbank Mortgage Rates

With motusbank, you can choose a fixed or variable rate mortgage. Upon doing some research, I found their mortgage rates to be highly competitive, and in many cases, they were lower than most of the competition. At the time of this writing, fixed mortgage rates begin at 2.49% for a 2-year term, to 2.82% on a 5-year term. A 1-year fixed is 2.84%. You can get a 5-year variable rate mortgage for 2.9%. One rate that is certain to appeal to borrowers, is the 3.75% that is available on the motusbank Home Equity Line Of Credit. With most banks charging between Prime + .5 to Prime + 1%, this represents a significant discount. Prime rate is currently 3.95%.

Mortgage Prepayment Options

With motusbank, you can pay down your mortgage more quickly, by taking advantage of a number of prepayment options designed with flexibility in mind. For starters, choose from weekly, bi-weekly, monthly, or semi-monthly payment options. Rapid weekly or bi-weekly payments are available and will ensure you save on interest by paying down your mortgage more quickly. Did you know that just by choosing a rapid payment option, you’ll pay your mortgage off almost 4 years faster (based on a standard amortization of 25 years)?

Other Prepayment Features:

  • Apply lump sum payments up to 20% of the original mortgage amount each year.
  • Increase your regular principal and interest payment by up to 20% without a penalty
  • With motusbank, you have the option of skipping up to one monthly payment per year

motusbank Personal Loans

You can get 2 types of loans through motusbank – a personal term loan and a personal line of credit. Personal loans are available up to $35,000. You can choose a fixed or variable interest rate, with a monthly payment option. One nice thing about getting a loan with motusbank is that they can let you know what interest rate you’ll qualify for, without placing a hit on your credit bureau. Right now, the lowest loan interest rate is 5.15%, far better than what you’d find at most banks, for an unsecured credit product.

You can also take out a personal line of credit with motusbank, either unsecured or secured by your home (HELOC). Unsecured line of credit rates start at 5.65%, while home equity line of credit rates start at 3.75%. As with most banks, the interest rate you qualify for will be based on your credit strength. The stronger you are as a borrower, the lower the rate that you’ll likely qualify for.

Good to Know – The motusbank Knowledge Centre

When dealing with a digital bank, there is a lack of personal touch that comes from meeting with an advisor face to face. And as much as we have become comfortable with self serve banking, a human advisor can still add a lot of value. Because of this, online banks must find ways for their customers to become educated on the products and services that they’re using.

I was really impressed with the resources offered under the ‘Good To Know’ section of the motusbank website. There, you’ll find a long list of articles designed to provide customers with financial advice on just about every stage of life. For example, you’ll find titles like, “Planning For Retirement As A Single Parent”, “Quick Tips For Handling Your Debt, or “Getting Financially Ready For A Baby”. Having this kind of tailored advice at your disposal can really help make life easier when you’re facing tough financial decisions.

Is motusbank Right for Me?

While I think motusbank has something for just about everyone, their product lineup suits certain clients more than others. For example, if you’re looking for a robust investment experience, you won’t find that at motusbank. Beyond short term, safety investments, such as high-interest savings accounts and GICs, there really isn’t anything for long term investors.

If you ask me, motusbank will appeal to the no-fee banking crowd, those who are looking for high-interest rates on their day to day chequing and savings balances and want the convenience of a digital bank. They are also a great option for anyone looking to borrow money. Their mortgage interest rates are as low as just about anything you’ll find on the market, especially their 3.75% Home Equity Line Of Credit.

Rates on personal loans and lines of credit are also very attractive, at just over 5.15% and 5.65% respectively. This is in comparison to interest rates at many of the big banks, which can often reach 10% or higher. Not to mention that you can complete the entire process from the comfort of your living room, and avoid making multiple trips to a bank branch. If no-fee chequing, high savings interest, as well as convenient and affordable borrowing appeals to you, then you’ll want to put motusbank near the top of your list.

Comments

  1. JF

    Many sources on the internet right now state that Motusbank is not available for Quebec. This is not 100% true. I recently contacted Motusbank and they confirmed the following:

    ”We don’t currently meet the regulatory requirements of operating in Quebec; therefore, we cannot actively solicit business in the province. However, we can allow you to onboard as a new member but you will be restricted to acquiring deposit products only.”

    ”The only accounts you would not qualify for would be any lending products such as loans, overdraft protection, lines of credit and mortgages.”

    Motusbank is a member of CDIC and protection covers all provinces in Canada.

    It’s important to clear this out! I lived in the province of Quebec and have Motusbank saving accounts!

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