TORONTO — While Canadians across the country continue to suffer the crushing effects of inflation and a drastic increase in borrowing costs, a silver lining to rising interest rates has emerged as Canada’s big five banks have begun to roll out new high interest savings accounts offering a whopping 0.8% return.
“When the Bank of Canada announced that they would be more than doubling the key interest rate to 2.5%, we did our part as proud financial stewards of Canada and immediately hiked our own prime rate and passed on every percentile of that increased borrowing cost to consumers as quick as we could,” said RBC Senior Economist Alan Cairns.
According to Cairns, raising interest rates for borrowing is just one piece of the puzzle to solving inflation. Banks also need to pass on the rise in interest rates to savings accounts, which encourages savings and slows the circulation of money.
“In the face of 30-year high inflation, RBC is proud to announce we are raising the amount of interest we will pay on savings accounts by an entire 0.3%, to a whopping grand total of 0.8%,” added Cairns at a recent webcast before pausing for mandatory applause from the audience of other bank employees.
RBC isn’t alone in rolling out the relief. TD has also announced they would be offering generous rates on their savings accounts as well.
“TD Bank is proud to announce that we will be raising the interest rate on our High Interest Tax Free Savings Account from 0.5% to 0.55%,” said SVP of Marketing Angela Milner. “It is our hope that this extremely generous increase of half of a tenth of a percent will help Canadians during this trying time to afford bread, or bus fare, or whatever else people without Lexuses spend their money on.”
With Canadians’ savings expected to effectively be worth almost 10% less a year from now in terms of real spending power, the increase in savings account interest rates has come as a relief to many Canadians across the country.
“They say not to put your money under your mattress, because over time it will lose value,” said Winnipeg resident Norman Franco. “I’m glad that Canada’s big banks have banded together to offer an option that is just barely better than that.”
“Before everything became more expensive, I was only getting 0.5% interest on my savings,” says single-mother Donna Barber, who explained she maintains an account with roughly $10000 for emergencies. “Now, I’m getting 0.55%, giving me an extra $5.00 a year, which is a huge help since it covers one month of the $5/month account fee.”
“Between putting your money in crypto and losing a ton of money and keeping it in cash and losing a fair bit of money, it’s tough to know what to do,” said recent university grad Muhammed Nassir. “With these generous rates, Canada’s big banks are definitely the least worst place to put my money.”
At press time, Canadian banking giant BMO announced they would be maintaining their Smart Saver Account at 0.5%, but would be putting some extra 0’s on the end of all their interest rates to make them feel higher, styling their savings account rate as 0.500%, saying it was “the least they could do.”