In this article:
Overview
Parent-paid interest allows you to top up the interest rate your child earns on their kids and teens chequing account, funded from your own account. It's a way to show your child how saving and compound interest work over time.
Eligibility
- You need an active kids and teens chequing account for your child.
How it works
- Kids and teens chequing accounts earn the same annual interest rate as the Wealthsimple chequing account.
- Parent-paid interest allows you to top up this rate each month, funded from your own account.
- You'll use a slider to choose your top-up rate, and a projection table shows your child what their balance could look like over time at that rate.
- We transfer your share of the interest to your child's chequing account on the 1st of every month.
Set up an interest top-up
- Open the Wealthsimple app and go to your child's chequing account.
- Tap Top up in the interest widget.
- Tap Reward for saving.
- Use the slider to choose the new interest rate.
- Choose the account you'd like to fund the top-up from.
- Review the details and confirm your top-up.
You'll see a confirmation showing the new rate, the funding account, the payout frequency, and an example of what the first payout could look like.
Manage or cancel your top-up
You can change or cancel your top-up anytime from your child's chequing account page.
- Tap the interest widget on your child's chequing account page.
- To update your rate or funding account, tap Change your top-up.
- To stop the top-up, tap Cancel interest top-up.
What happens if a payment doesn't go through
If your funding account doesn't have enough money on the 1st of the month, we'll skip that month's top-up. There's no retry, and we can't process it manually or apply it retroactively.
- After two consecutive failed payments, we'll automatically turn off your top-up. You can set it up again the following month.
- If your funding account is closed, your top-up is also automatically turned off.
Frequently asked questions
What's the difference between parent-paid interest and an allowance?
Parent-paid interest lets you top up the interest rate your child earns on their kids and teens chequing account, funded by you. It's calculated automatically each month based on their balance, so the more they save, the more it pays out. An allowance is a fixed amount you choose to give on your own schedule, and isn't tied to their balance or savings behaviour.
How does parent-paid interest work?
Kids and teens chequing accounts earn the same interest rate as the Wealthsimple chequing account. With parent-paid interest, you can add to that rate to teach your child about the power of compound interest. We'll transfer your share of the interest to their account on the 1st of every month.
Is this real interest, or is it a payment from me?
The extra amount your child receives isn't interest paid by Wealthsimple and isn't taxed by the CRA. It's a monthly payment you choose to make yourself, styled to look like interest so your child can see the effect of saving over time. We handle the calculation and payout for you each month.
What happens if I don't have enough money in my account when the payment is due?
If your funding account doesn't have enough money on the 1st of the month, we'll skip that month's top-up payment. If this happens twice in a row, we'll automatically turn off your top-up, and you can set it up again the following month.
Can I change my top-up rate or where the money comes from?
Yes. You can change your top-up rate and your funding account at any time from your child's chequing account page.
Can I cancel my top-up?
Yes. You can cancel your top-up at any time from your child's chequing account page. If you cancel partway through the month, you'll forfeit any interest that hasn't been paid out yet, and you won't be able to set up a new top-up until the 1st of the following month.
My child got a notification about interest. What does it mean?
When your top-up payment goes through, your child gets a notification letting them know you paid them interest and how much was added to their chequing account.
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