Oaken Financial Review: High Interest Savings With No Gimmicks
Recently, I wrote an article comparing the top high-interest savings accounts in Canada. It perhaps should come as no surprise that the vast majority of the accounts that made the cut were online bank offerings, from the likes of Tangerine, EQ, and Simplii. Free from the high overhead of traditional brick and mortar financial institutions, online banks are able to entice Canadians with lower fees and higher savings interest.
Oaken Financial was not included in my review, but they are a worthy competitor in the online banking space, specifically for their high-interest savings and GIC account offering. In the near future, I will make a point to update the other article to include Oaken, but for the time being, I’ve put together this full review. Enjoy!
Introducing Oaken Financial
Oaken Financial is a fully digital bank. While they do have a handful of offices in major cities, their services are designed to be delivered online. Oaken was founded in 2013 and is backed by Home Bank, which is a subsidiary of Home Trust Company. Home Trust is Canada’s largest independent trust company and has been serving Canadians since 1987.
Unlike other online banks, Oaken currently has just 2 products in their line up: a high-interest savings account, and a family of GIC products, both registered and non-registered. Let’s take a closer look at what’s available, starting with their high-interest savings account.
Oaken Financial Savings Account
Looking for a way to earn more interest on your rainy-day fund? The Oaken Financial Savings Account offers an interest rate the banks can’t match, with unlimited transactions and no monthly fee. There is also no account minimum. At the time of this writing, the interest rate is a very competitive 2.3%, the same rate being offered by EQ bank.
With Oaken, you can open your account four ways. Online (the most convenient option), over the telephone, in-person at one of their stores, and by mail.
- No monthly fee
- Competitive interest rate (currently 2.3%)
- Unlimited transactions
- No minimum balance requirement
- CDIC insured
Opening Your Oaken Savings Account
When you open your Oaken Savings account, you will be required to provide your SIN number along with a couple pieces of ID, and a void cheque. The latter is required to set up the funds transfer process. One drawback with Oaken is that they don’t yet have a mobile app, so you will need to use their website to access your account from your device, or a desktop computer.
Oaken Financial GICs
In addition to high-interest savings, Oaken has a series of GIC products available for customers. You can choose from both personal and commercial non-registered, and RRSP, TFSA, and RRIF options are available as well. Terms are available from 30 days to 5 years, with cashable, and non-cashable options.
You can choose to have your GIC interest paid in various frequencies, including monthly, semi-annually, annually, or upon maturity. The minimum deposit amount is $1000. Below is a sampling of current registered GIC rates (RRSP, TFSA, RRIF). Visit Oaken Financial’s website for a full listing.
1 Year 2.55%
18 months 2.60 (not available in an RRIF)
2 Years 2.65
3 Years 2.70
4 Years 2.80
5 Years 2.90
Is Oaken Financial Safe?
You can be assured that your money is safe with Oaken. As I mentioned earlier, they are a subsidiary of Home Trust Company, which has been doing business in Canada for over 30 years. Oaken Financial is also a member of the Canada Deposit Insurance Corporation (CDIC). This means that your savings and/or GIC deposits are protected up to $100,000 per registration, as they are with any major Canadian bank. Their online banking is fully encrypted, offering customers the same level of security you would expect with any other institution.
CDIC Coverage with Oaken Financial
As mentioned, your deposits with Oaken Financial are covered by CDIC. This applies to both GIC and savings accounts. Oaken has two separate CDIC registrations, under Home Bank and Home Trust Company. Being able to choose from more than one registration category means that more of your hard-earned dollars can be CDIC insured.
Scrolling through the Oaken website, I stumbled on their blog and was impressed by the content that I found there. Included are a number of helpful articles on various financial topics written by personal finance experts. They cover everything from TFSAs to emergency funds, as well as advice on retirement, paying bills and money tips for snowbirds headed south.
Also included is a series of YouTube videos, called ‘Saversodes’. These are short clips, each one a few minutes in length, featuring regular Canadians discussing topics like budgeting, and retirement while drawing on their own life experience. It’s very entertaining and definitely worth checking out.
How Does Oaken Financial Compare?
If you’re looking for a competitive interest rate from an online savings account or GIC, Oaken Financial is a solid choice. Their interest rates are similar to other online banks, and their account opening process appears to be clean and straightforward. They come up a bit short by not having a dedicated mobile app, limiting customers to using a more traditional desktop website. That said, you may not need the functionality of a mobile app for your savings account or GIC.
Which brings me to the one other drawback with Oaken. With only two products in their lineup (savings & GICs), competitors like Tangerine and Simplii have more to offer. For example, with Tangerine, not only can you open a high-interest savings account, you take out a mortgage or home equity line of credit, apply for a rewards credit card, an RRSP loan, or invest with Tangerine Investment Funds. In other words, if you’re looking for a one-stop shop, you may be better off looking elsewhere. However, if all you need is a place to store your money while earning an attractive return, then Oaken Financial is a worthy choice.