Wealthsimple Cash review 2024 - MoneySense (2024)

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Banking

By Barry Choi on July 30, 2024
Estimated reading time: 6 minutes

Wealthsimple Cash comes with high interest rates and a no foreign transaction fee card. Let’s take a closer look at the account.

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Wealthsimple Cash review 2024 - MoneySense (1)

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Wealthsimple Cash is a high-interest chequing/savings account that offers one of the highest interest rates in Canada. It has appealing yields and includes aprepaid Mastercard with no foreign exchange fee, so many consumers are naturally attracted to the account. Is it any good? The short answer is yes, but there are a few quirks to be aware of.

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What is Wealthsimple Cash?

Wealthsimple started as a robo-advisor offering low-cost portfolio management, but it has since expanded to provide more products and services, such as self-directed investing (under Wealthsimple Trade), tax returns, mortgages and savings accounts.

Wealthsimple describes the Cash account as a high-interest chequing account. That label is important: it’s what allows Wealthsimple to claim it offers the highest interest rate in Canada. (A few high-interest savings accounts, or HISAs, offer similar interest rates.)

Wealthsimple also incentivizes customers to spend the money in their account by offering rewards on purchases, which is likely another reason it’s referred to as a chequing account instead of a savings account.

How much interest does Wealthsimple Cash pay?

The interest rate you get from Wealthsimple Cash depends on your total assets held with Wealthsimple. Core clients (those with at least $1 in assets) earn 3.5% interest on their account balance. Premium clients ($100,000 or more in assets) earn 4.0% interest, and Generation clients ($500,000 or more in assets) earn 4.5% interest.

Note that these amounts are based on your total assets. So, if you have $10,000 in Wealthsimple Cash and $95,000 in managed investments, you’d be considered a Premium client and earn 4.0% interest on your Cash account.

Core and Premium clients who set up a direct deposit of at least $2,000 per month qualify for an extra 0.5% interest. The maximum interest you can receive is 4.5%, so Generation clients aren’t eligible for the interest boost.

What’s significant about these rates is that they are Wealthsimple’s everyday rates. Some other financial institutions may offer higher interest rates, but these typically apply only for a limited time or for new deposits.

How much does Wealthsimple Cash cost?

Wealthsimple Cash does not have any monthly fees or minimum deposit requirements.

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What is the Wealthsimple Cash card?

The Wealthsimple Cash card is a prepaid Mastercard available to anyone with a Wealthsimple Cash account. With this card, you can use the funds in your account to make purchases in-store or online. It’s essentially a debit card.

Despite the simplicity, the Wealthsimple Cash card has two significant features. First, you’ll earn 1% back in rewards on all purchases. This cash back can be applied to your account or invested into stocks or crypto through your Wealthsimple self-directed account.

Additionally, the card has no foreign transaction fees. Most traditional credit cards charge a foreign transaction fee of 2.5% when you make a purchase in any currency that’s not Canadian dollars. The Wealthsimple Cash card also waives foreign transaction fees on ATM withdrawals, so having the card is a cheap way to get cash in the local currency when you travel.(You may still be charged a fee by the retailer or financial institutional involved in your transaction, or a fee by the ATM provider.)

Is Wealthsimple Cash safe?

The deposits in your Wealthsimple Cash account are insured for up to $500,000 through the Canada Deposit Insurance Corporation (CDIC). This is five times the amount of CDIC insurance protection typically offered by HISAs in Canada.

This doesn’t mean the money in your Wealthsimple Cash account is held with five separate banks. Instead, it’s backed by five different CDIC member institutions that each provide up to $100,000 in coverage.

Wealthsimple Cash pros and cons

Wealthsimple Cash and the Wealthsimple Cash card are tied together, so you must consider the pros and cons of each before deciding if they suit you.

Wealthsimple Cash pros

High interest rate: You can earn from 3.5% to 4.5% interest on your savings.
Strong CDIC protection: Your funds are insured for up to $500,000 via CDIC insurance.
No foreign transaction fees: When using the Wealthsimple Cash card, you won’t pay foreign transaction fees on purchases or ATM withdrawals.

Wealthsimple Cash cons

Potential distractions: Through the account’s rewards scheme, Wealthsimple encourages you to use your savings to invest in riskier assets such as cryptocurrency and stocks.
Not a true credit card: The Wealthsimple Cash card is a prepaid Mastercard, not a credit card. So, you’re limited to what’s in your account (which may not be a bad thing).
Does not build credit: Since it’s a prepaid product, you do not build a credit history with the Wealthsimple Cash card.

Alternatives to Wealthsimple Cash

Wealthsimple Cash’s claim of being Canada’s highest-interest chequing account is accurate, but you shouldn’t immediately dismiss the competition. It’s always best to weigh your options to see what fits you best.

There are a handful of savings accounts offering high interest rates in Canada. But Wealthsimple’sclosest competition is EQ Bank’s new Notice Savings Account. With this account, you can earn up to 5% interest on your deposits with no minimum asset requirements and no fees. However, there is a catch. There’s a 10-day or 30-day waiting period to withdraw your funds if you want to earn 4.5% or 5% interest, respectively. EQ Bank does offer a personal account from which you can withdraw your funds at any time, but you’ll only earn up to 4% interest (it includes 2.5% interest by default and another 1.5% if you direct deposit your pay). EQ Bank also offers a no foreign exchange fee prepaid Mastercard that can be used for purchases and ATM withdrawals.

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If no foreign transaction fees is what you’re after, another option is Wise. Like the Wealthsimple Cash card, it’s a prepaid card. The difference with Wise is that you can hold multiple currencies and preload your account whenever the exchange rate is favourable.

If you prefer a traditional credit card, the Scotiabank Passport Visa Infinite Card has no foreign transaction fees, excellent travel insurance and six airport lounge passes annually. However, the card does have a yearly fee of $150.

The best no foreign transaction fee cards in CanadaRead now

Is the Wealthsimple Cash account good?

When looking strictly at the Wealthsimple Cash account, it’s good, as the high interest rate on deposits will appeal to many people. The Wealthsimple Cash card that comes with it is also great, since it doesn’t charge foreign transaction fees.

That said, Wealthsimple Cash is part of Wealthsimple’s overall platform, giving you access to riskier investment opportunities such as cryptocurrency. If you’re disciplined, the account is excellent, but it is also designed to encourage you to try some of the company’s other services, which may or may not be a good fit.

Read our in-depth Wealthsimple reviewRead now

About Barry Choi

Barry Choi is an award-winning personal finance and travel expert. He appears regularly on a variety of shows in Canada and the U.S. In addition to MoneySense.ca, his work has appeared in The Globe and Mail, The Toronto Star, The Financial Post and Ratehub.ca.

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Comments

Of course it encourages you to put money into investments. That is the primary purpose for Wealthsimple existing. The cash account is just a perk of holding your investments with Wealthsimple. If you don’t plan on buying stocks, why even have an account with them over a local credit union or one of the big 5 banks? And investing is only “risky” if you don’t know what you’re doing. What you mean is that stocks are volatile, which is just one component of risk. If you don’t know what you’re doing you should probably learn before investing, or use Wealthsimple’s robo advisors to build a portfolio for you. But you should probably learn about investing regardless.
Reply
You’re missing two of the biggest cons.
1) no cash withdrawals from ATMs
2) no SWIFT
So you will always still be tied to one of the traditional banks.
Another thing to note is that traditional credit cards usually gives you points on automatic debit orders (gym memberships, Netflix, etc) but WSC doesn’t.
I still use WSC for 95% of my banking needs.
Reply
In addition to the perks mentioned, you can also use your Wealthsimple Cash card to withdraw from any ATM in Canada and Wealthsimple will reimburse the ATM fee, up to $5 per transaction.
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