Wealthsimple Inc. is growing its services again with the launch of a new cash account.
Chief Executive Officer Michael Katchen would not say outright that the new product is designed to help the online investment platform compete with Canada’s big banks, but the non-promotional 2.4 per cent interest rate attached to the account might suggest otherwise.
“I think this will be competitive to someone’s primary chequing account,” Katchen told BNN Bloomberg in a phone interview on Monday. “We’ll have the ability in time where you can set up a direct deposit for your paycheck…unlike a chequing account where you’re not earning any interest, we’ll launch with 2.4 per cent interest”
“It won’t have the fees that people are frustrated with that come with a typical chequing account.”
Katchen said the new account is aimed at simplifying the investment process.
“Signing up for a bank account is not an easy thing to do and we’re trying to take that experience and make it five minutes or less on your phone,” he said. “We find that every time we do that with a new product, clients want to have a deeper relationship with us. So this is about extending that relationship moreso than displacing competition.”
The online financial services firm has been ramping up its product lineup over past several months – buying Vancouver-based online tax-return filing service SimpleTax and striking a partnership with Grayhawk Investment Strategies Inc. to provide technology, dealer and advisory services to high-net worth clients.
Katchen also said a move into the mortgage business could be in the cards.
“One of our biggest reasons for churn is not unhappy clients, it’s clients that need money for a down payment. They take out their investment account to fund a down payment on their house and it would make a lot of sense for us to help them with a mortgage when they’re ready for that,” he said.