Introducing Wealthsimple Cash: Great rates on money you’re not investing

Google+ Pinterest LinkedIn Tumblr +

Wealthsimple Cash is a new spending and saving account replacing Wealthsimple Save. It’s offering 0.90% interest, a stunning metal card, and a host of extra features.

Wealthsimple is one of our favorite fintech brands. Their platform Wealthsimple Invest is a roboadvisor that lets you invest in the stock market easily, affordably, and without any headache. If you want to know more about Wealthsimple Invest, check out our Wealthsimple Review here!

What is Wealthsimple Cash?

Wealthsimple Cash is replacing Wealthsimple Save, the savings account that previously gave users 0.90% interest. Wealthsimple Cash is offering an interest rate of 0.90% and functioning like a saving AND spending account. In other words, it’s a lot like a very high paying chequing account (except without cheques, because it’s 2020 and we are young people).

You can sign up for Wealthsimple Cash right here

Once you sign up for Wealthsimple, you can link a bank account and transfer money in. You’ll start earning that 0.90% interest rate right away.

The features of Wealthsimple Cash so far

Wealthsimple Cash is available now, but not yet in its full form. Wealthsimple is a nimble startup and they always launch as soon as they have something of value to offer, even if it’s not everything they’re planning to roll out. 

0.90% interest on your balance

You’ll earn 0.90% interest on all the money you have in your Wealthsimple Cash account. This is an incredible rate on what is essentially going to function as a spending account. Usually, high-interest rates like these are promotional, or limited

No account fees

Wealthsimple Cash charges no account fees or minimums. Unlike regular chequing accounts that have monthly fees or charge for transactions, especially if you don’t meet minimum balance requirements, you’ll pay $0 here. 

No minimum deposit period

You’re going to get the 0.90% interest all the time. Even though this rate is typical of GICs that demand you lock your money up for a fixed term, Wealthsimple Cash is giving you this rate now with no limits to lock your money in. 

Unlimited free transfers

Transfer your money out of Wealthsimple Cash to another bank account will be easy and cost $0.

Joint Accounts

You can open a joint account and further compound that 0.90% interest by pooling your saving efforts with someone else!

Seamlessly Integrated

Wealthsimple Cash will connect beautifully with Wealthsimple Invest, so you’ll see all your money in one place. It might be easier than ever to achieve Wealthsimple Black status now!

What features are NOT here (yet)

Wealthsimple Cash is planning to roll out a host of additional features. They are as follows:

A slick Wealthsimple Cash Card that’s made of tungsten metal

Metal cards used to be exclusive to luxury credit cards with super high annual fees. They’re weighty and cool and fun to flash when you make purchases, and now everyone can have one! This is the card you’ll use to make all your purchases with Wealthsimple Cash.

Wealthsimple Cash Metal Card

Typically metal cards cost a fee. Even KOHO charges a fee for their metal card! Wealthsimple Cash does not mention a fee for the card, and they say Wealthsimple Cash is a no-fee account, so it’s possible the card will be free. We will keep our eye out once it’s released!

ATM fee reimbursements

ATMs frequently charge $1 to $5 in withdrawal fees to get your own cash from your own bank account. Wealthsimple says they will reimburse you to a limit, but they don’t yet say what that limit is. 

Direct Deposit

You’ll eventually be able to send your paycheque directly to Wealthsimple Cash, where you can use your money to pay bills, make purchases, and invest. 

Bill Pay

You’ll be able to pay your bills and it sounds like they’ll even remind you when to do so!

Interac eTransfers

Wealthsimple Cash says they will provide Interac eTransfers, but does not mention if these will be free or charged a small fee. 

No Foreign Exchange Fees

This is a surprising and incredible perk of Wealthsimple Cash. Most cards typically charge a foreign exchange fee of 2.5% when you make purchases in another currency. This is on top of the currency exchange rate! No foreign exchange fees will make Wealthsimple Cash really stand out, especially compared to travel credit cards. 

Apple Pay and Google Pay Compatible

You might not want to take that gorgeous tungsten metal card everywhere. On nights where you want to leave a bulky wallet at home, your Wealthsimple Cash card will be in your digital wallet on your mobile phone. 

Wealthsimple Cash vs KOHO

A spending and savings account with a metal card sounds a lot like another fintech brand we love: KOHO. We looked at all the features of Wealthsimple Cash and KOHO to give you a breakdown of how they compare:

Feature

Wealthsimple Cash

KOHO

Interest Rate0.90%Coming Soon
Account FeesNoneNone
Minimum BalanceNoneNone
Cash BackNone0.50% (2% on certain categories Premium feature)
Transfers to external bank accountsYesYes
Joint AccountsYesYes
Metal CardComing Soon$159 ($59 if you refer 2 friends)
Direct DepositComing SoonYes
Bill PayComing SoonYes
Interac eTransfersComing Soonfree & unlimited
Apple Pay & Google Pay CompatibleComing SoonYes
No Foreign Transaction FeesComing SoonPremium feature
Price MatchingNoPremium feature
Financial CoachingNoPremium feature
Round-UpsNoYes
ATM Fee ReimbursementYes, to undisclosed limitNo
ProcessorUnknownVisa
Business AccountsYesNo

You can see that while their offerings are similar, KOHO actually has more features, especially if you’re a premium subscriber.

KOHO currently doesn’t pay interest on your balance, but KOHO pays 0.5% to 2% in cash back on your spending. This means your KOHO money is technically worth anywhere from 2.5% to 4%, which is significantly higher than Wealthsimple’s rate. 

It’s also worth noting that KOHO is already up and running with all the features Wealthsimple is promising, including No Foreign Transaction fees for premium subscribers. We’ll have to wait until Wealthsimple Cash launches its full product offering to truly compare them to KOHO. Want to know more about KOHO? Check out our KOHO review here

We suspect which one is truly best for you will depend on how you use your money and what you want from a spending & savings account. If you’re a spender, KOHO will likely be the winner because they give you cash back. If you’re just looking for a high-interest account to keep your cash accessible, Wealthsimple Cash will probably be it.

How does Wealthsimple Cash compare to other competitors?

Canadian fintech is truly in a battle for the Canadian consumer right now, and the real winner is all of us. As these brands race to provide the most perks to entice customers, you’ll reap the rewards. The losers are the Big Banks who will be wondering how to market to the Millennial and GenZ market. (hint: we want high interest and great perks!)

0.90% interest rate is amazing, but not the highest

Wealthsimple Cash’s interest rate is super attractive, and it’s only barely behind EQ Bank’s new announcement that they are offering 2.00% everyday interest* on their EQ Bank Savings Plus Account

The difference of 0.05% is truly splitting hairs unless you have a huge balance in your account, but it’s important to know most of the “coming soon” features are already offered by EQ Bank. You can direct deposit your paycheque, pay bills, and send free Interac eTransfers® from your EQ Bank Savings Plus account. You can’t do this with Wealthsimple Cash yet. 

Is my money safe with Wealthsimple?

Yes! Wealthsimple is not CDIC insured, but this does not mean it is not insured at all. Money invested in Wealthsimple is held in their custodial broker, Canadian ShareOwner, which is protected by the Canadian Investor Protection Fund (CIPF)

For more information about how CIPF and CDIC differ, check out this post

Final thoughts

Wealthsimple Cash is an awesome and competitive addition to the fintech market. It’s offering an incredible return on your savings, with the eventual flexibility of making it a very powerful spending account. This product has a lot to offer but is still different enough from competitors that you’ll have to evaluate the details to see if it’s really right for you. At present, its functionality is pretty limited but we are looking forward to the full suite of features coming live in the near future!

Share.

About Author

Money After Graduation Inc. is a financial literacy website dedicated to helping Millennials and Gen Z pay off debt, invest in the stock market, and afford the life they want!

Comments are closed.