Alterna Bank is a digital bank that offers an RRSP eSavings Account with a competitive interest rate of 1.15%, no fees, and no minimum balance. And even though it’s a relatively unknown bank (compared to the big 5), the balance is still secured through the Canada Deposit Insurance Corporation (CDIC).
The nice thing about the account is that it offers the tax deferral advantages of an RRSP while earning a competitive interest rate, allowing for compound tax-free growth year over year.
Alterna Bank RRSP eSavings Account features
Let’s take a look at what the Alterna Bank RRSP eSavings Account can offer you.
Why You Want It
$0 min balance and no monthly fees + Competitive interest rates.
Special Features
- Competitive interest rate
- Quick, simple online application
Eligibility
- You must be a Canadian resident
- You must have reached the age of majority in your province or territory
- Have an account at another major Canadian Financial Institution
Provinces
ALL
Interest Rates
Any balance
1.15%
Features
# Of Free Transactions
0
# Of Free Interac E-Transfers
0
Max Promotion Rate
N/A
Welcome Bonus Value
N/A
Promo End Date
N/A
Alterna Bank RRSP eSavings Account product rating: 3.8 stars
The Alterna Bank RRSP eSavings account is a great option for anyone looking to earn a competitive interest rate while taking advantage of the tax-shelter bonus of RRSP contributions. Applications are fully online with simple steps and instructions, and the mobile app is handy and easy to use.
The potential downsides are minimal – you can’t make outgoing transfers from an RRSP account and the current interest rate is low compared to other investment opportunities, which means you may be able to make a higher return for your money elsewhere. Still, Alterna Bank has offered a product that is easy to understand, with no minimum balance and no fees.
Rating methodology
To calculate our Genius Ratings, we compare the features of the account or product in question with other similar products in Canada. We give each feature a score out of 5 based on that comparison. Once we’ve rated all the features, we run them through our proprietary algorithm to produce a final rating out of 5.
Learn more about our rating methodology.
The pros of Alterna Bank RRSP eSavings Account
The Alterna Bank eSavings RRSP Account offers great ease of use through easy transfers and a handy mobile app. The costs are also kept low with no minimum balance or monthly fees.
Pros
Low costs
The nice thing about Alterna Bank is they’re transparent about their fees – you can see the entire fee schedule on their website. For the RRSP eSavings account, the monthly fees are $0 and no minimum balance is required.
Ease of use
The Alterna Bank RRSP eSavings Account is accessible on any cell phone using the Alterna app. You can easily make transfers from different banks to your RRSP account, but transfers from the RRSP account aren’t available on the me-to-me platform since there are tax implications when withdrawing money from your RRSP. You’ll have to make withdrawals by phone.
Competitive interest rate
Alterna Bank offers a competitive interest rate for savings accounts (currently 1.15%) which is very appealing for anyone looking to earn simple tax-sheltered income within their RRSP.
The cons of Alterna Bank RRSP eSavings Account
Since it’s an RRSP account, there are some limitations you’ll have to consider.
Cons
Account balance is limited by your contribution limit
Like any RRSP account, the amount you can contribute is restricted by your contribution limit which is available on your annual Notice of Assessment from the CRA. You’ll need to double check you have sufficient contribution room for the current year before you make any contributions.
You may make more money elsewhere
The interest rate of 1.15% is high for an RRSP savings account, but you may want to consider investing your money elsewhere depending on your tolerance for risk and investing timeline. Since a savings account is relatively low risk, the rates are always low compared to other higher risk options. Not to mention Alterna’s rate has also been dropping for a while now – in July 2019, it was about 2.3%.
Small online bank
Alterna is mostly an online bank, so if you’re looking for a full listing of services that come with a big bank, you won’t be able to find it here. That said, they do have a handful of branches in Ontario and Quebec if you’re looking to talk to someone face-to-face.
Alterna Bank RRSP eSavings Account alternatives
When it comes to competing products, it’s hard to match what Alterna bank offers – an award-winning account with a competitive interest rate on an app that is very easy for anyone to use.
 |  | |  | |
|---|---|---|---|---|
| Account | Alterna Bank RRSP eSavings Account | Scotiabank Money Master Savings Account | Scotiabank MomentumPLUS Savings Account | Neo Savings Account for Youth |
| Genius Rating | ||||
| Why You Want It | $0 min balance and no monthly fees + Competitive interest rates. |  $50 GeniusCash + Automatically save with every debit purchase through Bank The Rest. | Get up to 4.75%* interest on your money + No monthly fees. | High interest rates + Prepaid Mastercard with unlimited transactions. |
| Interest Rates |
|
|
|
|
| # Of Free Transactions | 0 | 0 | 0 | Unlimited |
| # Of Free Interac E-Transfers | 0 | 0 | 0 | N/A |
| Max Promotion Rate | N/A | N/A | 4.75% | N/A |
| Welcome Bonus Value | N/A | N/A | N/A | N/A |
| Promo End Date | N/A | N/A | See Issuer for Details | N/A |
| Open an account See more Alterna products Compare | I Want This Deal See more Scotiabank products Compare | Open an account See more Scotiabank products Compare | Learn More See more Neo Financial products Compare |
FAQ
What’s the current Alterna Bank RRSP interest rate?
The current interest rate is 1.15%, but this can change at any time. Your best bet is to visit the Alterna Bank site directly.
Are there any fees associated with the Alterna Bank RRSP?
There are no fees associated with the Alterna Bank eSavings RRSP account.
How can I withdraw money from an Alterna Bank RRSP?
You’ll need to call Alterna Bank directly to make a withdrawal from an RRSP account, which has tax implications – taxes are withheld on RRSP withdrawals since it’s treated as income. This is simply a feature of being an RRSP account, and not a strike against Alterna Bank. Click here to learn more about this product.
Editorial Disclaimer: The content here reflects the author's opinion alone, and is not endorsed or sponsored by a bank, credit card issuer, rewards program or other entity. For complete and updated product information please visit the product issuer's website.
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