This is my first review and rating of the financial tools that I use and recommend. These will be as in depth and as much information as I know. I will be giving a brief summary of what the service provides, and my ratings of three key sections for my passive income tools which are: Safety, Liquidity, and Return.
Tangerine is a Canadian bank that is completely online. This way it can offer better than average rates and minimal fees. Setting up an account is straightforward although can take a little bit of time. They have new account bonuses which are really great for really anyone, is free money ever a problem? They offer all the services of regular banks – chequing, saving, GIC, TFSA, RRSP, credit cards, and investment funds. Their website is incredibly easy to use, and their mobile app has blown me away with its simplicity and ease of use. The mobile cheque-in deposit works very smoothly and I have ever had any problems with it. As a service and platform, I give it a 5/5.
The opening account bonus is $50 (Through October 2017, after that it will be $25) when you open an account with an initial deposit of $100 or more. That is an instant and guaranteed 50% return. That is pretty unbeatable. For students like myself, that amount of money really helps. To activate that, during your account enrollment simply enter the orange code 43067168S1 and with an initial deposit of $100 (I believe you also have to keep the account for three months, but trust me, you won’t want to close it), and you get $50 for free. Great deal.
Now, as a passive investment tool, I am using the savings account. I mostly use it as a “staging ground” where I deposit and keep all my money until I send it away to my other tools. It has a modest 0.8% interest rate, which is quite low for an investment, but as a regular savings account it is far better than any other options in Canada. My overall ratings are:
Yeah, my first tool and I give it a negative rating!?! What’s that about? I am being overly critical here because every penny of mine has to work for me as hard as I worked for it.
Safety: Now 3/5 doesn’t mean it is unsafe, it is likely the safest tool I will use, but there are other factors that come into play. Firstly you won’t technically lose your money by holding it in the account, so it gets a high rating for that reason. It is insured like all major Canadian banks, to $100’000. So if it goes bankrupt or you will get anything up to $100’000 back. Now for the negatives.
For me at this time, $100’000 isn’t a problem, but considering that I would need nearly four million dollars in this account to achieve my passive income goals, it’s not really an option. Remember when I said you won’t technically lose your money? If you have $1000 in the account, that $1000 will still be there (if you don’t spend it) after a year. But in year the currency will undergo inflation, at a 2-3% rate. So in reality, even with the $8 you made in interest that year, the $1008 you have in your account now will be worth LESS than a year ago. That sucks. So that is why it loses the second point (and why the returns rating is negative)
Liquidity: 4/5 It is pretty great with liquidity, with debit and credit cards it is easy to spend the money if need be, but cash can sometimes be a hassle. Most regular banks will charge a small fee to withdraw cash from other banks, and sine Tangerine has very few ATMs (there are some linked banks that will provide free transactions) it is harder to get cash than most banks, and that is why it loses the half point.
Returns: -2/5 Wow. Yeah it may seem harsh but I have to be really critical of all my rate of returns since I am not earning a lot of money to invest. The fact is that 0.8% is nowhere near enough to produce results that will lead my to my goals. 0.8% is far below inflation and therefore you are essentially losing money. I will admit is a far better rate than most savings accounts, which tend to hover around 0.15%. As a staging ground it is a good rate, and you will make some returns by holding your money here. 0.8% is far better than 0.15% or a 0% return for keeping it in your wallet.
So in total, as a passive investment tool, Tangerine savings account earns a respectable 5.5/15.
Tangerine, for usability earns 5/5.
If you have made it this far I would really appreciate comments on my format, categories, and depth of assessment so I can improve in my future reviews. I will be soon writing my review on LendingLoop so stay tuned for that within a week.