Promotional Savings Rates: Check the Period and Eligible Balance
Note the promotion dates and check whether the rate applies to new deposits only or to the whole balance.
In this article
The promotional savings rate is institutions' favourite recruiting tool. Its real return depends on four lines of conditions that the ad compresses into one number. The period first: whether it runs on fixed dates or from your deposit, it shortens for anyone arriving mid-promotion. The scope next: new deposits only or the whole balance, which changes everything for money already in place. The aftermath finally: the regular rate that follows the promotion is often below the rate of the account you are leaving, which reverses the twelve-month calculation. Then there is the effort: opening, transferring, tracking and repatriating, for a sometimes modest net gain. A promotion works with a calendar, a full-year calculation and an exit date decided in advance. This article gives the four checks, the standard calculation and the reminder to set before the very first transfer. The end date is the promotion's most important number.
Pin down the promotion's exact window
A savings promotion lives between two dates, and how they work decides the real gain. Some promotions run on fixed dates, March first to June thirtieth, say. If you arrive mid-course, the window shortens accordingly, and the headline rate applies only to the remaining weeks. Others start from your deposit and offer the full duration whenever you arrive. The distinction is in the conditions, never on the poster, and it can double or halve the gain for a latecomer. Note both dates at opening and calculate the gain on the duration actually available. A four-month promotion joined halfway is a two-month promotion whose price has not been updated.
Verify which money earns the rate
The headline rate's scope is the second decisive condition: new deposits only, or the whole balance? Most promotions target fresh money, the kind arriving from another institution, and money already in place stays at the regular rate. Some even require a net growing balance, with a withdrawal cancelling the eligibility of an equivalent deposit. If you were hoping to boost existing savings at the same institution, the headline rate often simply does not apply. Read the exact definition of eligible money before transferring anything. Calculate the gain on the amount that actually earns the rate, not on the account's total balance.
Look at what waits after the end
Every promotion lands on a regular rate, and that rate is often below the account you are leaving. The institution recruits with the headline rate and retains through inertia. To compare honestly, cover a full twelve months: the promotion for its duration, then the regular rate, set against your current account left in place. A promotion of a few months followed by a very low rate often loses that annual comparison. The remedy is calendar-based: set a reminder on the end date and decide the exit in advance, with the money moved the day after the promotion to the account with the best regular rate. You then collect the gain without paying for what follows.
Weigh the effort against the net gain
Price the net gain of a promotion hunt before starting: the real rate gap multiplied by the amount and duration, minus tax outside a TFSA. On small sums the result disappoints: a few dozen dollars against opening an account, the transfers, watching the conditions and the final repatriation. On large sums and long promotions, the exercise pays well. Set your personal threshold, the amount below which the hunt is not worth the hour, and apply it without second thoughts. Also always compare with the lazy alternative: an account with a solid regular rate and no conditions, earning without calendars or reminders. The best promotion is sometimes the one you never needed to track.
Quebec scenario
A couple in Beloeil sees a 6% savings promotion go by and nearly moves $25,000. Before filling out the form, they put four precise questions to the institution. Does the promotion start at account opening or at deposit? It runs from March 1 to June 30 regardless of when the money arrives, so showing up in May already shrinks the window. Does the rate apply to the whole balance? No, only to new deposits, and money already at the institution stays at the regular rate. What happens afterward? Back to 1.4%, less than the 3.7% their current account pays. Finally, is the gain worth the effort? Over the four real months, the net difference comes to about $190, before counting the time spent opening the account, moving the funds and bringing them back at the end. They go ahead, with a calendar reminder set for June 30 and the decision already made to move the money back to the regular account the day after the promotion ends.
Checklist
- Note the promotion's start and end dates
- Check whether it targets new deposits only
- Read the regular rate that follows
- Calculate the net gain over twelve months
- Compare with the current account before leaving it
- Price the opening and transfer effort
- Set a reminder for the end date
- Decide in advance where the money returns
- Execute the return the day the promotion ends
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