In this article, you'll learn about the following:
- The three interest rates offered by Wealthsimple on Cash account balances: 4%, 4.5%, and 5%
- How interest is calculated and paid
- Qualifications for each rate
- What kind of protection you receive in your Cash account through CDIC.
Wealthsimple offers three different annual interest rates on the balance in your Cash account. The rates are annualized rates, calculated daily, and paid monthly directly into your Wealthsimple Cash account.
Below are the three interest rates offered as of July 23, 2023, along with how you will qualify for each:
|
Interest rate* |
How you qualify |
|
4% |
All clients qualify as soon as they open a Cash account. |
|
4.5% |
Be a qualifying Wealthsimple Premium client |
|
5% |
Be a qualifying Wealthsimple Generation client |
*The interest rates listed above are not promotional rates.
Receiving interest in your Cash account
Interest is calculated based on a daily closing balance, the value in the account at 11:59PM EST each day. It is then paid out monthly, with interest accumulated in each calendar month to be paid out within 7 business days of the 1st of the following month.
Your interest rates are subject to change at any time.
Let's say you keep $1,000 in your Cash account for 1 month and your first direct deposit is made on April 1st.
At the standard 4% annualized rate, you would earn around $40.00 in interest for the year (4%*$1000), or around $3.33 each month. Since interest is calculated daily and paid out monthly, you would receive around $3.29 at the end of April: (30/365)*40 = 3.29.
At the boosted 4.5% annualized rate, you would earn around $45.00 in interest for the year (4.5%*$1000), or around $3.75 each month. Since interest is calculated daily and paid out monthly, you would receive around $3.70 at the end of April: (30/365)*45 = 3.70.
At the maximum 5% annualized rate, you would earn around $50.00 in interest for the year (5%*$1000), or around $4.17 each month. Since interest is calculated daily and paid out monthly, you would receive around $4.11 at the end of April: (30/365)*50 = 4.11.
All interest accumulated from April 1st to 30th will be paid out within 7 business days of May 1st of the same year.
To opt-out of receiving interest in your Cash account, you can reach out to our support team for assistance.
Taxes on interest earned in your Cash account
Wealthsimple Cash accounts are non-registered accounts, meaning you will have to claim any interest earned during tax season.
We will send you a T-5 Statement of Investment Income before March 1st in order to help you report interest earned in your Cash account. Once your tax documents are ready, you can find them directly through your Wealthsimple account.
For more information on when your tax documents will be ready, you can reference this article.
A note from our legal team
Our Cash product is offered by Wealthsimple Investments Inc. (“WSII”), a member of the Canadian Investment Regulatory Organization, and Wealthsimple Payments Inc., a FINTRAC registered money services business. The funds you add to a Cash account (the “Funds”) are ultimately held securely in trust with a single or multiple members of the Canada Deposit Insurance Corporation (“CDIC”). CDIC protects eligible deposits held at CDIC member institutions in case of a member institution’s failure. Wealthsimple Payments Inc. and WSII are not CDIC member institutions. Under the trust framework, CDIC insures eligible cash balances up to $100,000 per beneficiary, per member institution, provided certain disclosure rules are met. Coverage is free and automatic. Learn more about how CDIC protection works. Funds may be spread across multiple different CDIC members in order to extend the CDIC coverage to up to $300,000 in eligible deposits. The advertised interest rate for the Cash Account is derived from interest earned by Wealthsimple on the funds. The Funds are settled with any CDIC member(s) one business day following the date that Funds are reflected in the Account.
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