More Money Podcast - What is Wealthsimple Cash All About (and Is It Safe)? - Money Minute with Jessica Moorhouse

Episode Date: February 21, 2020

For this Money Minute episode, after much listener demand, I’m going to be sharing what is Wealthsimple’s new savings/chequing account Wealthsimple Cash all about, is it safe, and how does it compare to other high-interest savings accounts offered by Motive Financial, EQ Bank and LBC Digital. FYI, Wealthsimple Cash is only available in Canada currently. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome back to another Money Minute with Jessica Morehouse. I am excited about this episode because I've been getting a lot of requests specifically to do a Money Minute on this topic. So let's do this. Okay, so you may have heard the recent news a few weeks back. The robo-advisor Wealthsimple launched Wealthsimple Cash, a new hybrid saving spending account to replace their original Wealthsimple Save Wealthsimple Cash, a new hybrid savings spending account to replace their original Wealthsimple Save account. The news got a lot of attention mainly because it offers an interest rate of 2.4%, which is fairly high interest these days. At the time of the announcement, the only two institutions that offered higher interest were Motive Financial's Savvy Savings

account at 2.8% and Laurentian Bank's LBC Digital High Interest Savings Account at 3.3%. Seeing an opportunity, or maybe this was in the works for a while, I'm just speculating, EQ Bank almost right away raised their savings account interest rate from 2.3% to 2.45%. Now I've got to say, talking about savings accounts is almost never exciting, but for a good week or two, it kind of was. It kind of was. Now I've been getting a lot of questions about Wealthsimple Cash and how it compares to Motive Financial, Laurentian Bank, and EQ Bank's offerings, so I wanted to share my findings. First, Wealthsimple is not a bank. Therefore, their Wealthsimple Cash account is technically not a bank therefore their wealth simple cash account is technically

not a quote-unquote savings account at least in the traditional sense secondly you will receive a client card with your wealth simple cash account but it will not be a debit card your wealth simple cash card will actually be a prepaid visa card which means the card will use the Visa payment system and your card will be accepted anywhere Visa is accepted. But maybe there's some places that don't accept Visa. So, you know, there's some limitations, I guess. Get groceries delivered across the GTA from Real Canadian Superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. Currently, because Wealthsimple is not a bank,

your deposits are not insured by the Canada Deposit Insurance Corporation, CDIC. The funds you put into a Wealthsimple cash account are held in an account with Wealthsimple's affiliated custodial broker, Canadian Share Owner Investments Inc., which is a member of the investment industry regulatory organization of Canada, IROC. This means that your account is protected by the Canadian Investor Protection Fund within specified limits if share owner goes bankrupt. However, and this is where it gets sort of confusing, share owner deposits the cash you add to your WellSimple cash account in a trust at an account with one or more federally regulated schedule one banks. I'm talking about the big six banks in

Canada. And the accounts at these banks are not covered by CDIC. So from what I can gather, if share owner goes bankrupt, your funds are protected. If one of the banks involved with the trust goes bankrupt, you are not. So if you're asking if your funds are safe within a Wealthsimple Cash Account, I guess the answer is yes and no. It depends on who goes bankrupt. Last thing I'll share about the Wealthsimple Cash Account, it is currently only available in Canada. It is not yet available in the US and the UK. So I hope that answered a lot of your questions about this new Wealthsimple Cash Account.

What I want to leave you with really, though, is I want you to think about where your cash is sitting right now. What interest rate are you earning? Are you earning 2.4%, 2.45%, 2.8%, 3.3%? If you're earning less than that, well, maybe you should think about looking at some of your options and earn some more money on your money. Well, that is another Money Minute with Jessica Morehouse. I hope you enjoyed it. Let me know what you want me to do future Money Minutes on. I got a lot of requests for this one. So I definitely will do it on whatever the heck you want.

So that is it for me. I hope you enjoyed it. I will be back here next Wednesday with another new interview. So have an amazing weekend and I will see you very soon. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.