Motusbank Online Bank Launches With Low HELOC, Competitive GICs

Motusbank, a subsidiary of Meridian Credit Union, has launched in Canada. First announced in February, a full range of banking and borrowing services are now available on its website, motusbank.ca.

As an online-only bank, Motusbank can be accessed via its mobile app on the Apple App Store and Google Play. App users can check balances, transfer funds, and deposit cheques; Apple Pay and Google Pay, however, are not supported. Statements and other documents are available only on desktop.

The main appeal of Motusbank lies in its competitive mortgage rate and simple online application. Fixed-rate mortgages are available with terms ranging from six months to five years; variable-rate mortgages all have five-year terms. The bank is currently advertising a 3.09 percent interest rate for closed fixed-rate mortgages with terms ranging from one year to five years; the same rate also applies to its closed variable-rate mortgages.

Given the current crop of online-only banks, which offer many of the same services and advantages, Motusbank is making a direct play for home buyers who are shopping for the lowest rates and don’t want to spend time haggling.

For everyday banking, Motusbank offers a no-fee chequing account, with unlimited debit, in-network ATM and e-Transfer transactions, as well as a 0.50 percent interest rate on every dollar. For savings, a high-interest savings account features a 2.25 percent interest rate – which also applies to the RRSP and RRIF savings accounts – with no minimum balance requirement; the TFSA savings account features a higher 2.5 percent interest rate, again with no minimum balance requirement.

To further attract prospective homeowners, a secured home equity line of credit is available at 3.75 percent interest. Other borrowing options include personal loans starting at 5.15 percent interest and personal lines of credit starting at 5.65 percent interest; Motusbank’s prime lending rate is 3.95 percent.

Investments come in the form of escalator, short- and long-term GICs, with a minimum deposit of hundred dollars. Interest rates range from 3.15 to 3.30 percent on the 3-year and 5-year escalator GICs, from 2.70 percent to 3.25 percent on the long-term non-redeemable GICs and from 2.05 to 2.55 percent on short-term GICs. In particular, the 3.10 percent interest rate on registered GICs on terms as short as 18 months is one of the best currently available in Canada.

Despite the competitiveness of its chequing and savings products, the lack of a credit card, relatively scarcity of surcharge-free ATMs and high personal line of credit interest rate may hinder its adoption as a primary financial institution.

As more providers enter the Canadian landscape it is important to shop around for the best mortgage rates. Compare rates today using the Ratesupermarket.ca comparison tool.

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