Canada’s central bank lowered the benchmark interest rate by 0.5% on March 4, March 13 and March 27, 2020. When that happens, financial institutions across the country reevaluate the rates they offer on savings accounts. We never like lowering our rate, but keep in mind at some point the benchmark rate will likely rise again, and when it does ours will too.
Here are a few considerations:
Interest rate fluctuations are normal, expected, and beyond our control
- Canada’s central bank sets the benchmark interest rate; eight times per year the Bank of Canada meets to determine whether the rate will increase, decrease, or remain unchanged, based on various economic factors.
- Rate fluctuations are normal. The previous rate had been in place for a relatively long time: since October of 2018.
We give you the best rate available to us
- When the Bank of Canada changes the benchmark rate, the majority of financial institutions in Canada, including Wealthsimple Cash, follow suit.
- The bank partners we work with to offer Wealthsimple Cash pay us an interest rate that’s tied to the benchmark rate. When the Bank of Canada lowers the benchmark rate, like they did on Wednesday, our bank partners do too. The interest rate they pay us is now lower, which lowers the interest rate we can pay our clients.
- With WS Cash you’re always getting a transparent, non-promotional rate — no introductory offers, minimum account balances or other “catches”. The rate you see is the rate you get — period.
Lower interest rates may have other positive effects on your finances
- Lower interest rates mean that when you’re borrowing money, you’re paying less for it. So if you’re paying interest on a loan, like a mortgage, you may see lower rates become available