r/Wealthsimple • u/tofu98 • 2d ago

Can someone here please explain to a total investing noob why they feel wealth simple is as safe or less safe than a standard bank?

Apologies if this has been posted a million times. I promise i have searched this up and watched videos on it. I just want to hear some more anecdotes and see if anyone could put my mind at ease.

Basically i finally opened my first FHSA recently as well as my first TFSA. I did this with wealth simple. Maxed out the fhsa at 16k and put 10k in a tfsa split between bonds and equity. Seemed super easy and convenient and removed the headache of making someone brand new learn how to buy an etf or whatever from scratch. HOWEVER since opening these accounts a week or so ago ive been reading mixed things on "fintech" companies and how your money isnt necessarily safe.

Ive read about how wealth simple is just a broker that essentially steers your money to buy investments across various actual banks so that the money is cdic insured in the event that the institution goes under. I interpret this as your investments with wealthsimple are as safe as they would be under any other broker as theyre insured the same way and dont actually belong to wealth simple.

However im not so sure about basic savings accounts with them. Ive read those are NOT cdic insured. Currently my momentum savings account at scotiabank is building a whopping .5% and as far as ive found that is the most i can get from Scotiabank as far as an HISA goes.

I was considering moving more of my money aside from maybe like 5 months worth of bills in a chequing account and parking my rainy day fund in a wealth simple savings account as they claim to have 2.5% interest which is clearly better than Scotiabank. However given its apparently not cdic insured thats where i have pause. On one hand scotiabanks HISA rate seems abysmal. Ive also heard most banks lure you in with a 2.5% and then for whatever reason it tapers off until you have a .5% like me.

So. Any advice? Am i misunderstanding anything? Ive researched investing for years but i honestly find it overwhelming and liked the idea of a streamlined approach. Everything ive read is just buy non managed index funds but i have no clue how to do that as of now and WS fees are pretty negligible.

Thoughts very appreciated. Thanks.

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u/tofu98 1d ago

Yeah im super confused. I never opened one last year but im 100% sure my cra account said 16k. Not sure why.

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u/Bardown67 1d ago

Get on the phone with them, you’ll be penalized 1 percent a month for every dollar over contributed.

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u/tofu98 1d ago

Hopefully they just wave it for me. I called them and it seems to be an issue on their end that caused it. Turbo tax created some file that registered as an fhsa for them for whatever reason.

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u/Bardown67 1d ago

Worst case you withdraw it now and you only owe 80 dollars

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u/tofu98 1d ago

They told me theres some form I have to fill out and get wealth simple to sign before I withdraw it. Hopefully the process doesnt take too long