Thursday, October 18, 2007

The Canadian High-Interest Savings Strike Back

In my previous post on Canadian savings accounts, I wrote about the experiences of opening a new account with ING Direct, HSBC Direct, Canadian Tire Financial Services and ICICI Bank. ING emerged as the winner, due to their fast and smooth account opening process. Now that I've spent some time with each of these accounts, I want to give a run-down of each institution's web interface, and the process of moving money in and out of these accounts.

Web Interface

All four institutions have easy-to-navigate web sites. One nuisance I found is that, from the pages I've linked to above, both HSBC and ICICI launch a new browser window when you click their "login" link. This isn't a big deal, but it always irks me when a website hijacks my user experience like this. The only reason I'm at HSBC's website is to view my account information, so don't leave me with multiple HSBC windows open. Also, when logging out of your account, ICICI prompts you for confirmation that you really want to leave. Again, a minor detail, but it's annoying to have to click multiple links just to log out.

In terms of security, HSBC and ING both ask a security question at login. For HSBC, this is a single identifying question (mother's maiden name, home town, etc.), while ING has a list of three questions that they cycle through, so you get a different question with each login. HSBC requires a "strong" 8-character password with both numbers and letters, while the other three require a six-digit numeric PIN. When ING asks for your PIN, they also display an image that you select the first time you enter the site, so that you know you're at a legitimate website.

Strangely, HSBC only asks for three of the eight password characters at login. For example, if your password is "mOnEy4mE", they might prompt you with the following: "*_**_**_", which would be filled out as "*O**y**E". I'm not sure why they went this route, rather than simply asking for the entire password.

Once you are past the login screen, all four institutions show you a list of all your accounts and their corresponding balances. When you click on an account, ICICI shows you a summary of the current status of the account (i.e. balance, currency and interest rate), while the other three take you straight to a screen that includes recent transactions and current balance. ICICI requires a number of clicks to get to a transaction list, and HSBC does not seem to display the account's interest rate anywhere on the site. HSBC's navigation is extremely cluttered, with lots of non-savings-related links crowding the screen.

Advantage: ING wins this one, due to its simple, intuitive interface and strong security. Canadian Tire is a close second, but their PIN-only authentication doesn't feel as secure as ING's login process.

Transfers into Savings

ING, Canadian Tire and ICICI all provide a "Move My Money" link on every screen that takes you directly to a form to initiate your transfer. HSBC, on the other hand, requires you to click the "Bank to Bank Transfers" link in the sidebar, and then the exposed "Make a bank to bank transfer" link in order to get to the transfer form. Again, this is a minor inconvenience, but it becomes annoying quickly.

Canadian Tire has a two-page transfer request form: you enter the "from" account and amount on the first page, and then select the "to" account on the second page. The other three institutions have all this information on a single page. All four allow you to specify immediate, post-dated, or recurring transfers, and all four provide a final confirmation screen with a reference number. HSBC and ICICI both allow memo text for transactions.

One odd behaviour is that ICICI defaults to Bangladesh Taka as the currency for the transfer, even though the account is in Canadian currency. It's frustrating to have to select the currency every time you make a transfer.

After you have requested a transfer, HSBC and ICICI allow you to call up a confirmation page for that transaction, including the reference number. Canadian Tire provides a line-item view of the transfer in the transaction history, and also includes the reference number, while ING does not repeat the reference number. Although I haven't had any problems with transfers to or from ING accounts, if having a reference number is important to you, you should print the confirmation screen at the time you initiate the transfer.

Canadian Tire credits your account immediately after you request the transfer. The other three credit the account on the next business day (ICICI does this in the afternoon, which may have something to do with their being an Indian company), and all four debit the external account (thereby completing the transfer) at the end of the day the savings account was credited. All four institutions begin interest accrual as soon as the account is credited.

All four institutions claim to place a five-day hold on transfers into savings. ING and Canadian Tire display the amount on hold, with ING also displaying the expiry date of the hold. HSBC and ICICI do not display the amount on hold, but they show the "available balance", which does not include the held funds. In my test transfer, HSBC was the first to release the hold on the funds. ING and ICICI released the hold on the day following HSBC, and Canadian Tire released the hold the day after that. Essentially, HSBC held funds for four business days (including the day the savings account was credited), ING and ICICI held funds for five days, and Canadian Tire held funds for six days. I've found ING to be consistent with this five-day hold, but I've only transferred funds into the other accounts once, so I'm not sure how much their hold times vary.

Advantage: A tie between ING and Canadian Tire. Both have a simple transfer process, but Canadian Tire credits the account (beginning interest accrual) sooner, while ING makes the funds available sooner. The choice depends on how quickly you need access to the transferred funds.

Transfers out of Savings

When requesting the transfer, both ING and Canadian Tire display the account balance in the description of the savings account. Note, however, that ING displays the available balance (excluding holds) while Canadian Tire displays the total balance (including held funds).

As with transfers into savings, Canadian Tire debits the savings account immediately, while the other three debit the account on the next business day. I'm not sure whether this affects Canadian Tire's interest calculation. All four institutions credit the external account at the end of the next business day. Note that your chequing account may have a hold on these deposited funds, so you may not have immediate access to the money.

Advantage: ING, by virtue of its simple interface, and the fact that you have access to the funds the same day that they stop accruing interest.


ING has the most intuitive interface, they have good site authentication, and their transfers are quick. Although they do have a five-day hold on deposited funds, they follow this hold policy rigidly, so you know exactly when the funds will be available. The other three all claim a five-day hold, but ICICI is the only other one that seems to follow it. In my mind, if HSBC can hold the funds for less time than they said they would, it's reasonable to think they might hold the funds for longer, as well.


FourPillars said...

Thanks a lot for doing the research and posting about it.

I'm thinking of setting up a high interest savings account at some point.


SavingDiva said...

Thanks for the review. I also like ING (great interface). I'm not a fan of HSBC...citibank has been okay...

small fish said...

This has been a great review of the high-interest accounts! I have ING and you've reaffirmed them for me!


Anonymous said...

Why is PCF left out?

Loonies And Sense said...

I haven't looked at PCF, because I haven't had a "constant" $1,000 to maintain the decent interest rate. The four institutions I'm reviewing all have a "no fees, no minimums" promise.