Online financial services company Wealthsimple introduced new features to its chequing account and launched a credit card Wednesday.
Wealthsimple renamed Wealthsimple Cash to Wealthsimple Chequing but continues to promise zero account fees and claims to offer Canada’s highest chequing account interest rate. New features include up to $1 million in Canada Deposit Insurance Corp. (CDIC) coverage, no foreign transaction fees and rewards for high-net-worth clients.
Wealthsimple wanted to expand beyond retail investing and into banking, Sam Newman-Bremang, senior product director of banking and growth, said in an interview. He has been involved with launching the firm’s banking products since 2021.
In past years, some clients moved their chequing account from another bank to Wealthsimple to take advantage of higher interest rates, while others moved only their investment accounts for a better online trading experience, Newman-Bremang said. This ends up splintering a client’s financial accounts.
“We’re building banking so that it works really well across all of your finances,” he said. “The big idea is that we are the one financial relationship you need, and embedded in that is that all of our products work better together.”
Clients with less than $100,000 in assets earn 1.75%. Those with between $100,000 and $500,000 earn 2.25%, and clients with $500,000 or more get the full 2.75%. Clients who direct deposit a prescribed amount of income each month receive an additional 0.5% interest rate bonus.
Since Wealthsimple isn’t a bank, it spreads depositors’ funds across up to 10 licensed banks to offer 10 times the typical CDIC coverage of $100,000.
Wealthsimple will also reward clients for every $100,000 deposited above the first $100,000 with benefits such as a free premium rideshare membership, a free online will or airport lounge passes.
“The idea [is] that we would give a portion back in rewards for consolidating your wealth with us and growing your wealth over time,” Newman-Bremang said. “One of the ways that you can kind of get off track is by having the wrong behaviour, maybe pulling money out at the wrong time. … We’re incentivizing you to continue to grow your wealth.”
Additionally, Wealthsimple launched its first credit card, which offers 2% cash back with no cap and no foreign transaction fees, among other benefits.
“We listen to our clients and really try to understand what is making their financial life complicated,” Newman-Bremang said. “FX fees just stood out. It was the most aggravating, annoying fee out there.”
By the end of the year, Wealthsimple will launch asset-backed lines of credit, allowing clients to leverage their existing account balance as collateral. The borrowing rate will start at 4.45%, and the application process will be entirely online.
The firm also plans to offer cash deliveries in the Greater Toronto Area later this year, with more cities to follow.
“We don’t have branches, but the branch is going to come to you,” Newman-Bremang said. Clients can expect the same level of service for cash delivery as with food delivery apps.