Battle of the Banks: Scotiabank vs. RBC Royal Bank

Craig Sebastiano
by Craig Sebastiano May 3, 2018 / No Comments

The big banks in Canada offer everything from mortgages to credit cards. But trying to decide which one to bank with can be difficult, especially when many of their products are nearly identical.

When you compare the GICs and high-interest savings accounts, it’s easier to make a decision. This time, we pit Scotiabank against RBC Royal Bank.

GICs

Scotiabank has two types of non-redeemable GICs: Long-term and special rate GICs. The rates on the long-term GICs are similar to what other big banks offer while its special rate GICs are much higher. Here’s an overview of the rates on non-redeemable GICs the two banks offer on one- to five-year terms as of May 1, 2018:

Term Scotiabank long-term GICs Scotiabank special rate GICs RBC Royal Bank
1 year 0.85% 2% 1.2%
2 years 1% N/A 1.25%
3 years 1.05% N/A 1.6%
4 years 1.1% N/A 1.5%
5 years 1.25% 2.75% 1.6%

At Scotiabank, the minimum investment is $500, while at RBC Royal Bank it’s $500 for RRSP, TFSA, RESP, and registered disability savings plan (RDSP) accounts.

Market-linked GICs

If you’re looking for higher potential returns without taking on a lot of investment risk, you may want to consider market-linked GICs. Both banks offer these types of GICs.

Read: Should You Put a Market-Linked GIC in Your RRSP?

Scotiabank and RBC each offer five of these GICs and the minimum investment at both institutions is $1,000. The terms for the five market-linked GICs Scotiabank offers are two, three, and five years. And the terms for three of RBC’s market-linked GICs are two, three, and five years while the two others only have three-year terms.

High-interest savings accounts

There are a number of savings accounts at Scotiabank and RBC Royal Bank. The Scotiabank Momentum PLUS Savings Account and the RBC High Interest eSavings account offer the highest potential returns. The interest rate on the RBC High Interest eSavings account is 0.9% on any balance. The Scotiabank Momentum PLUS Savings Account has tiered interest rates based on how long you can go without withdrawing money from the account. As of May 1, 2018, these are the rates on the Scotiabank Momentum PLUS Savings account:

Regular interest rate Premium interest rate Total interest rate
Momentum Plus 0.9% N/A 0.9%
90-day period 0.9% 0.75% 1.65%
180-day period 0.9% 0.8% 1.7%
270-day period 0.9% 0.85% 1.75%
360-day period 0.9% 0.9% 1.8%

Until June 29, you can snag a special interest rate of up to 2.65% if you have a Scotiabank Momentum PLUS Savings Account, enroll to participate in the offer, and deposit money that is new to Scotiabank into the savings account for at least 90 days, up to 360 days.

The winner

Scotiabank wins this round because of its special rate GICs and its high-interest savings account offers the potential to produce a great return despite the fact that it’s a tiered rate.

Scotiabank Momentum PLUS Savings Account

Open an account

  • Regular interest rate: 0.9%
  • Earn premium interest rates based on how long you save (90-day increments)
  • No minimum balance, no monthly fees

Also read:

Flickr: The City of Toronto