EQ Bank swamped over 3% offer

TORONTO • Equitable Bank has had to add staff to its account- opening operations and call centre after being overwhelmed with people trying to take advantage of a new savings account that pays three-per-cent interest.

High- interest savings accounts are one way to grab attention in the financial services world, and Equitable Bank is the latest to embrace the strategy with an eye-popping three-per-cent rate.

“Processing account openings did get backed up just after launch,” Andrew Moor, Equitable’s chief executive, said in an interview.

He said the additional staff had “just about caught up” with the backlog Wednesday night.

Now, efforts are turning to explaining to customers when they can expect their new accounts to be opened.

“Our call centre has been unable to deal with communicating with our customers and providing the service we believe our customers deserve and should expect,” Moor said.

Additional call centre staff is being deployed “to ensure we can deal with concerns as they arise,” he said, adding that there is a lag of about five business days to process a cheque and open a new account even when the process is working smoothly.

“We need to do a better job in being clear on these timelines and are working on that,” Moor said.

“This is not an instant process but we are working on it hard.”

Debra Powell, a Kamloops, B. C., resident, said she put a stop payment on her cheque this month after waiting about two weeks for a new account at EQ bank to be opened.

“I thought, I’m not feeling that comfortable,” Powell said in an interview, adding that she sought out an email address online and contacted the bank.

“They responded a couple of days later that they were so overwhelmed that they couldn’t keep up,” she said.

Equitable, an established player in the alternative mortgage space, launched the new online banking venture in January under the banner EQ Bank.

The t arget is t o open 10,000 accounts this year by tapping an estimated $ 400 billion sitting in Canadian bank accounts that pay very little or no interest.

Still, Moor allowed that demand for EQ Bank’s high-interest savings account “surprised us a bit.”

Most high-interest savings accounts are marketed as promotional, or short- term, but Equitable did not put a timeline on its offer to pay more than traditional bank accounts.

Moor said last month that the bank can make money on the spread between the high rate paid on the savings accounts and the interest charged on many of its mortgages, which are extended to clients whose credit profiles are too thin or weak to secure lower- interest loans from traditional banks.

Still, he said EQ Bank’s savings account rate would probably be reduced at some point.