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There are plenty of options for saving and investing in Canada, whether it’s via high-interest savings accounts, TFSAs, RRSPs, or other types of accounts. To help you decide which financial institution might be a good fit for your needs, we’ve taken a close look at Oaken Financial’s offerings, which are available for both personal and commercial clients. Oaken offers GICs and a high-interest savings account (HISA). Read on for a review of those accounts, and what else Oaken has to offer.
Who is Oaken Financial?
Oaken Financial was launched in 2013, but its parent company, Home Trust, was founded more than 30 years ago, in 1987. You may know of Home Trust because of their mortgage and credit card offerings; Oaken is Home Trust’s consumer deposit business. When you open an account or buy a GIC with Oaken Financial, you can choose to do so with either Home Trust or Home Bank, which is a bank the former bought in 2015. Both institutions are members of the Canada Deposit Insurance Corporation (CDIC), which means that any deposits in an Oaken HISA, or investments in a GIC are insured up to $100,000 (this amount includes both your principal deposit and interest earned).
Oaken has bricks-and-mortar locations in Halifax, Toronto, Calgary and Vancouver (though they’re currently closed because of COVID-19) where you can open an account or get information in-person. But you can also sign up or access your account anytime by using Oaken’s online banking site. They also have a phone service, which is open on weekdays from 8 a.m.–8 p.m. (though, again, this has been impacted by COVID-19, so they’re asking customers to reach out to them via the secure members’ messaging centre online).
Oaken Financial review: GICs and High-Interest Savings Accounts
Oaken Financial offers a high-interest savings account and GICs for both personal and commercial clients (think businesses, condo corporations, non-profits). Curious about these options? Read on for a rundown of their ins and outs.
Oaken Financial GICs
Oaken’s GIC offerings include both registered options, meaning that you hold them inside an RRSP or TFSA; and non-registered options, so they cover many types of investor needs. Savers have the choice of terms as short as 30 days and as long as 5 years, with interest rates ranging from 2% to 2.65%, depending on the length of the term and when you choose for your interest to be paid out to you.
It’s important to select the right GIC for your situation, so you can access your money when you need it. If you’re unsure of what you’re saving for or when you might need to get your hands on your money, a cashable GIC allows you to access your investment relatively soon after you’ve made it without getting dinged with a penalty (but keep in mind cashable GICs typically pay lower rates of interest). A short-term GIC is a decent choice if you aren’t likely to require that money for the medium term (say you’re saving for school tuition, or a holiday that’s a year or more away) and want to earn interest while keeping your money safe. For savings goals that are further in the future, a longer-term GIC is a solid choice, as it pays the highest rate of interest. But beware, if you access your money before the term is up, you’ll get hit with a penalty.
If you’ve exceeded your RRSP or TFSA contribution limit, GICs could also be a good place to keep and earn interest on additional savings you don’t need to access in the near term.
Registered GICs (Oaken offers options to hold inside an RRSP, TFSA or RRIF) are a decent option if you are saving for retirement, or are already retired, and want to keep your investment tax-sheltered.
About Oaken Financial GICs
Most Oaken Financial GICs* require a minimum deposit of $1,000. The exception is their RRIF (Registered Retirement Income Fund) GIC, which calls for a deposit of at least $10,000. All of their GICs are insured by the CDIC, as long as deposits don’t exceed the $100,000 limit (including interest and principal).
In regards to the non-registered options, Oaken offers both long- and short-term GICs, which are non-redeemable (this means you’ll pay a penalty if you cash them in before their term’s maturity date), as well as cashable ones, which you can dip into after either 30 or 90 days without penalty, depending on the type you’ve chosen.
Oaken also has GICs that can be held inside registered accounts, including Tax-Free Savings Accounts (TFSAs); Registered Retirement Savings Plans (RRSPs); and Registered Retirement Income Funds (RRIFs).
Registered Oaken Financial GICs:
- Tax-Free Savings Account (TFSA) GICs – An Oaken TFSA GIC* is non-redeemable, comes in 1-year, 18-month, 2-year, 3-year, 4-year and 5-year terms, and requires a minimum deposit of $1,000. Rates start at 2.5% and go up to 2.65% depending on the term you choose. Interest is compounded annually and paid at maturity, or if you prefer, paid annually inside your TFSA.
- Registered Retirement Savings Plan (RRSP) GICs – The Oaken RRSP GIC* is non-redeemable, comes in 1-year, 18-month, 2-year, 3-year, 4-year and 5-year terms, and requires a minimum deposit of $1,000. Rates start at 2.5% and go up to 2.65% depending on the term you choose. Interest is compounded annually and paid at maturity.
- Registered retirement Income Funds (RRIF) GICs – By the end of the year you turn 71, the Canada Revenue Agency (CRA) requires you to convert any RRSPs you hold into RRIFs. You can’t contribute to a RRIF, but it does allow you to continue to grow previous savings in a tax-sheltered way. The CRA rules say you have to take out minimum payments every year from your RIF, and you can do so annually, semi-annually, quarterly or monthly with an Oaken Financial RRIF. This product is non-redeemable, comes in 1-year, 2-year, 3-year, 4-year and 5-year terms, and requires a minimum deposit of $10,000. Rates start at 2.5% and go up to 2.65% depending on the term you choose. Interest is compounded annually and paid at maturity.
Non-registered Oaken Financial GICs:
- Long-term GICs – Oaken’s long-term GICs* are non-redeemable, require a minimum deposit of $1,000, and come in 1-year, 18-month, 2-year, 3-year, 4-year and 5-year terms. Rates start at 2.4% and go as high as 2.65%, depending on the term and the interest payment schedule you choose. Interest can be paid annually, semi-annually or monthly.
- Short-term GICs – Oaken’s short-term GICs* are non-redeemable, require a minimum deposit of $1,000. (They are also available from 90 days to hold inside an RRSP with a minimum deposit of $2,500). They come in terms of 30–59 days, 60–89 days, 90–119 days, 120–179 days, 180–269 days, and 270–364 days, with rates starting at 2% and going as high as 2.45%, depending on the term you choose. Interest is compounded annually and paid at maturity.
- Cashable GICs – An Oaken cashable GIC* is available in 30-day and 90-day terms, and requires a minimum deposit of $1,000. Rates are either 2% or 2.05%. Interest is compounded annually and paid at maturity.
Rates and terms
Oaken GICs are available with terms starting at 30 days, and going up to 5 years. Interest rates begin at 2% and at the highest end hit 2.65% (these rates vary depending on the term you choose and, when this option is available, the interest payout schedule you select). We’ve gathered all of Oaken’s GIC offerings in the tables below for you to scan.
|Term||Interest paid annually||Interest paid semi-annually||Interest paid monthly|
|Term||Rate after 30 days||Rate after 90 days|
Registered GICs (RRSP, TFSA, RRIF):
*The 18-month term is not available to hold inside a RRIF.
Oaken Financial’s High-Interest Savings Account
Looking for a high-interest savings account that will let you earn money while keeping it easily accessible? Oaken Financial’s HISA* offers a competitive 2% interest rate with no minimum balance requirement, and it’s available to both personal and commercial clients. Because this is a straight savings account, it doesn’t come with the ability to write cheques, nor can you deposit cheques into one, and you can’t use it to pay bills. On the upside, there are no transaction limits and no monthly fees. Plus, you can easily transfer money to and from any outside accounts you link your Oaken HISA* to with electronic funds transfers. You can even set up automated transfers from outside accounts so you can use it to save for a specific goal or as an emergency fund. The Oaken high-interest savings account is accessible at all times via their online banking site (though there isn’t a mobile app). Here are some more details about this account.
- Interest rate: 2%
- Minimum balance: None
- Monthly fees: None
- Transaction limits: None
- CDIC insured?: Yes; deposits are insured by CDIC up to $100,000 (this includes both the principal and interest)
- Cheques available: No
- Bill payments: Not available
- Electronic funds transfers to and from linked financial institutions: Yes; transfers can be one-time or recurring
- Access: Accounts and banking statements are available via their online banking site at all times from any location. Customer service is normally accessible by phone Monday to Friday from 8 a.m. to 8 p.m., but because of COVID-19, they’re asking customers to reach out via the site’s secure message centre instead
- Mobile app: No
- Paper monthly statements available?: Yes, for a fee of $2 per statement
Is Oaken Financial right for me?
Overall, Oaken Financial offers some decent options in terms of GICs. Their rates are competitive and there is something for most investors; though, at a $1,000 minimum, entry may not be accessible for some people. There is also a lot to recommend about their high-interest savings account: a decent interest rate, no monthly fees, no minimum balance. However, the lack of a mobile app could be frustrating. But if you’re looking for a financial institution that will let you earn more than you would with a typical bank’s savings account, Oaken Financial could be a good fit.
MORE ON SAVING:
- Compare the Best GIC Rates in Canada 2020
- Using a TFSA to save for retirement
- What is an emergency fund and how to build one