Wealthsimple Cash Review

  • 5 min read

Wealthsimple Cash is a program within the Wealthsimple system designed to provide simple choices for all Canadians who want to build wealth. Many Canadians do not have the time or knowledge to make the best-informed decisions about where to invest their money. This program will help them. Wealthsimple offers an account which combines spending and saving. It can be used as a means of investment that includes stock trading that is free of commissions.

Start by signing up to Wealthsimple and downloading the trade app. Once set up, you can connect to your bank account which will allow you to deposit funds for trading purposes. Once the money has been transferred, you can start buying and selling stocks without any commission from Wealthsimple.

Wealthsimple allows you to purchase exchange traded funds or ETFs along with stocks on US and Canadian exchanges. You can start in as little as five minutes when using this program.

Investing & Trading Accounts

Investing Accounts: You can choose from up to three packages when selecting the Investing account option.

  • Basic: Zero up to $100,000
  • Black: $100,000 to $500,000
  • Generation: Over $500,000

The Basic account does charge a 0.5% management fee, but provides auto-rebalancing, auto-deposits, reinvesting of dividends, and expert advice. The Black and Generational accounts augment the features of the Basic by reducing the management fee and adding tax loss harvesting, tax efficient funds, and numerous other programs and advantages. 

Trading Accounts: If you primarily want to buy and sell stocks and ETFs, then the Trading account is for you. There are no minimum balances to keep and no commissions on any trades that you make. You can also access your list of stocks easily within the program.

Cash Accounts. Here too, there is choice:

Wealthsimple Cash Account

This Cash account is arguably the most attractive for many investors as there are no monthly fees or fees charged if your account has a low balance. It is a hybrid saving and spending account, which means that you can put money back to accrue interest while also spending money from the account for your needs.

By combining a spending and savings account into one, it simplifies keeping track of your money. The system is designed to reach short-term savings goals. This means that you can earn up to 0.75% when using the Wealthsimple Cash account.

In addition, you can keep just a single dollar in your account. With no fees for management, transfers, or withdrawals, the money is safe no matter how low the balance. In addition, the account offers the Wealthsimple Cash Card.

Wealthsimple is not a bank, but it does allow you to save money on your terms. It also partners with companies like Visa and Galileo Processing which provides a pre-paid card based on your Wealthsimple Cash Account balance.

Future offerings from Wealthsimple for the Cash account will include

  • no fees for foreign transactions,
  • an e-transfer system to send money
  • account withdrawals using ATMs found across Canada.

Personal, TFSA, and RRSP Accounts

Personal: This is the easiest account to open. Its primary use is to allow you to withdraw cash to make everyday purchases without having to follow government regulations. You can make the account as large or as small as you want.

TFSA: This is a Tax Free Savings Account (TFSA) or registered investment account that allows for gains to be made without tax by the Canadian government. This type of account offers little in the way of interest, but you can use different programs to put funds into your account which include the following:

  • Stocks & Bonds
  • ETFs
  • Investment Certificates that are Guaranteed
  • Cash

The TFSA is limited in terms of how much you can contribute each year. The government does have mandates on the amount that can be placed into the account.

RRSP: Short for Registered Retirement Savings Plan, this is designed for Canadians who want to save money for retirement. Money that is contributed to the RRSP will not be taxed until you pull the money from the account. This “tax-advantaged” plan which was set up by the Canadian government to encourage people to save money for retirement purposes.  

The money will be taxed when it is withdrawn. Presumably, your income will be lower in retirement and subsequently your taxes will be lower.

Wealthsimple Cash Advantages

 Security: The two-factor security system (2FA) protects your financial information. When combined with data encryption, it adds an additional level of security. The accounts are held within the Canadian ShareOwner broker and protected by CIPF, offering maximum security for your funds.

Simplicity: You do not need to keep track of paperwork or understand insider jargon. You can make purchases or sales of your stocks or ETFs by using the mobile app. It only takes a few taps for you to make purchases, move money, and add or subtract from your accounts.

No Commissions: Wealthsimple Cash does not take commissions for any trade that you make. This means that you keep all the money used for purchasing stocks and ETFs.

No Account Minimum: If you only have one dollar, you can get started with Wealthsimple Cash.

The bottom line is that Wealthsimple Cash is designed for those who are just starting to invest their money. They offer TFSA and RRSP accounts that provide tax-free savings.

While Wealthsimple Cash is not for everyone, particularly experienced investors, it is a good starting point for those who have a smaller amount of capital to invest and lack the knowledge to know the best opportunities.

View more information about Wealthsimple Cash.

Christopher - BSc, MBA

With over two decades of combined Big 5 Banking and Agency experience, Christopher launched Underbanked® to cut through the noise and complexity of financial information. Christopher has an MBA degree from McMaster University and BSc. from Western University in Canada.