Sometimes saving money isn’t all about the highest interest rate. Sometimes it’s just about having an easily accessible second account to put away a chunk of your pay cheque for another day.
This is where most of your savings come from – not from the 1% or 2% of interest you may earn, but from your own disciplined schedule of moving money over.
If you’re a BMO client, that means using one of their savings accounts seems like your easiest option.
But which one should you use? And are they worth having?
Or should you consider an online bank with higher rates instead?
Let’s take a look.
- Overview of BMO’s savings accounts
- The pros and cons
- The features
- Fees to look out for
- Are BMO savings accounts safe?
- How do they compare to alternatives?
- The verdict
Overview of BMO’s 4 savings accounts
Here are the basic features each of BMO’s 4 savings accounts offer you:
| Account | Savings Builder | Smart Saver | Premium Rate | U.S Dollar Premium Rate |
|---|---|---|---|---|
| Interest rate | Up to 0.75% | 0.7% | 0.01% | 0.05% |
| Monthly fees | $0 | $0 | $0 with chequing account | $0 with chequing account |
| Transferring money | 1 free transfer out per month | 1 free transfer out per month | Based on your chequing account | Based on your chequing account |
| Interac e-Transfers | Not available | Not available | Not available | Not available |
| Minimum balance | None | None | None | None |
| Cool features | Get bonus interest if you increase your balance by at least $200 per month | None | Increased access to funds since it’s connected to your chequing account | Funds are stored in U.S. dollars |
| Learn more | Learn more | Learn more | Learn more | Learn more |
None of them let you use Interac e-Transfers, so they’ll likely not be a good replacement for your chequing account.
In fact, the last 2 options actually need to be supplementary to your chequing account, though they do note you can ask in-branch about opening them on their own.
The pros and cons
So with all this in mind, what’s good and bad about BMO’s savings account offerings?
The good
- 0.7% interest on the Savings Builder account is actually pretty impressive for a Big 5 savings account.
- If you’re a BMO customer already, having all your banking in one place makes it easier to keep track of things.
- Getting increased transactions based on your chequing account is an interesting feature that’s a pretty unique feature to BMO.
- No minimum balance to achieve before you start earning interest.
And the not so good
- Online bank accounts offer much better interest rates, especially if you consider the “Premium Rate” is as low as 0.01% – compared to up to 2% or more.
- Premium Rate accounts are often tied to a chequing account, which will likely have a monthly fee.
- Limited transactions plus no Interac e-Transfers make it hard to get the money out when you need it.
Related: BMO Chequing Accounts: The Pros And Cons Of A Big Bank
BMO Savings Account features
Let’s take a closer look at some of the more unique features BMO offers with some or all of their savings accounts.
Bonus interest rate when you increase balance by certain amount
One of the most unique features BMO offers comes with their Savings Builder Account.
You’ll get a base earn rate of 0.1% no matter what, but if you increase your monthly balance by at least $200 each month, you’ll get an extra 0.45% interest for that month.
This is a great way to encourage you to set up those automatic deposits – you’ll be saving at several times the speed this way.
Related: BMO Air Miles World Elite Mastercard Review: The Best Air Miles Card In Canada
Supplementary accounts for your chequing plan
Something different that BMO does is encourage clients to have a “bank plan” instead of just several different accounts at different institutions. Though this is likely just to keep you loyal, it does come with some benefits for you as a client.
This is available for both the Premium Rate and U.S Dollar Premium Rate accounts, letting you add it on to your existing chequing account.
Neither of these accounts have impressive rates, but your transactions per month are now combined with your chequing account. So if you have the BMO Performance chequing account – their most popular – you’ll get unlimited transactions out of your savings account.
You can also have up to 20 Premium Rate accounts, letting you create a whole saving network for each goal you have in mind. When it comes to your Savings Builder and Smart Saver accounts, you can only have 1 each.
Related: BMO Rewards Mastercard: A Flexible Rewards Card With No Annual Fee
U.S. dollar option
Having a U.S. dollar option (with the U.S. Dollar Premium Rate account) is getting quite popular with banks, giving an easy way to avoid exchange fees.
These are good if you earn some sort of income in USD and want to spend that money in America. You can have them deposited into this account and they’ll be held in USD so you never have to exchange them at all, as long as you also spend it in USD.
Just keep in mind this is not the same as something like a no foreign exchange fee credit card which waives the fee – a U.S. dollar account avoids exchange altogether.
Are there any fees involved?
Though these are savings accounts, there are some fees you’ll want to look out for.
Monthly fee
None of these accounts come with monthly fees, but if you get a Premium Rate account you may be paying a fee on your BMO chequing account.
Otherwise you don’t have to worry about a monthly bill eating into your savings.
Transaction fees
Both the Savings Builder and Smart Saver accounts only come with 1 free transfer out of the account per month. Any additional transfer you make, along with any withdrawal, will come with a $5 fee – definitely best to be avoided.
On the bright side, this can serve as a deterrent to not spend your savings. You’re supposed to be saving it after all.
If you have a Premium Rate account that’s connected to either the Premium or Performance chequing account, you’ll never have to worry about transaction fees. But if not, your transaction fees will only be $1.25 instead (based on the chequing fee).
Related: BMO World Elite Mastercard: World Elite Perks + BMO Rewards
Are BMO savings accounts safe?
As safe as any online account can be these days – you can never really know. That’s why it’s a great idea to spread out your money across several accounts and institutions. So in the unlikely event that your accounts are compromised, you’ll have plenty of backup funds.
BMO also has an electronic banking guarantee where they promise to reimburse you for 100% of your losses. The problem with these kinds of guarantees is you have to make sure they have no cause to deny your claim – so you have to closely follow all their safety guidelines.
Also be sure to regularly check your accounts so you can report an issue as soon as possible.
Here’s their safety agreement and security center for more details.
How does it compare to alternatives?
There are plenty of savings accounts out there, so it’s a good idea to do a bit of research on your options before committing to one place.
Let’s look at another Big 5 bank option as well as an online-only option.
Comparison to a big bank: BMO vs. RBC
RBC is another one of the biggest banks in Canada, so let’s see how their best savings account stacks up against BMO’s best.
| Account | BMO Savings Builder | RBC High Interest eSavings |
|---|---|---|
| Interest rate | Up to 0.75% | 0.65% |
| Monthly fees | $0 | $0 |
| Transferring money | 1 free transfer out per month | 1 free RBC ATM withdrawal per month |
| Interac eTransfers | Not available | $1.00 each |
| Minimum balance | None | None |
| Cool features | Get bonus interest if you increase your balance by at least $200 per month | None |
If you keep up with the $200 per month requirements, you’ll be earning more with BMO. But if that’s something you can’t guarantee, then RBC will get you a flat 0.05% on everything, regardless of how much you deposited that month.
A cool feature RBC has over BMO is the fact that you can make Interac e-Transfers, though these are $1 each and you don’t get any free. But at least it’s an option.
So if you just want the most interest PERIOD, then BMO wins. If not, RBC may be a bit more convenient for you.
Comparison to an online bank: BMO vs. EQ Bank
EQ Bank is a popular online bank, meaning what it lacks in physical storefronts it makes up for in extra features.
| Account | BMO Savings Builder | EQ Bank Personal Account |
|---|---|---|
| Interest rate | Up to 0.75% | 2.75% |
| Monthly fees | $0 | $0 |
| Transferring money | 1 free transfer out per month | Free electronic fund transfers |
| Interac eTransfers | Not available | Free |
| Minimum balance | None | None |
| Cool features | Get bonus interest if you increase your balance by at least $200 per month | Get an EQ Bank card for extra cash back |
If you're looking for the most interest on your money, learn more about the EQ Bank Personal Account here:
If you’re looking for a simple place to stash some extra cash and earn a higher-than-average interest rate, EQ Bank Personal Account may be exactly what you’re looking for. It does have a few other features, including the ability to easily send International Money Transfers, but otherwise it’s mostly geared to earning you interest.
- High daily interest rate
- Easy access to all other EQ Bank products
- Less expensive international money transfers
- Zero everyday banking fees
- Free Interac e-Transfers, electronic funds transfers, and bill payments
- No minimum balance
- No welcome bonus
- Age of majority
- Canadian citizen
- Very high interest rate
- Includes a prepaid cash back Mastercard
- No ATM fees, plus reimbursement for any independent fees
$25 GeniusCash + Total of $60 off your first four orders + free delivery (Eligible for New Customers in ON and QC only)
The verdict
Overall, BMO will give you a trustworthy place to store your extra cash. And while you won’t get the highest interest rate on the market, you’ll get a pretty good one if you stick to the BMO Savings Builder account and meet the monthly requirements.
If you’re a BMO customer who puts a lot of stock in having most of your money all in one place, then their savings accounts can definitely be worth it for you.
But if you want to maximize your interest, while also spreading your money out for safety reasons, then there are online banks out there that can serve your purpose better.
What about you?
Do you have a BMO savings account? Would you recommend it to others?
Are there some hidden features or perks you like about it?
Let us know in the comments below.
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