But if you have a plan for your future, financial goals, or a little extra money, high-interest savings accounts (HISAs) are excellent financial tools that can have your money earning money for you.
HISAs are also excellent savings tools for long-term and short-term savings goals; many of the best high-interest savings accounts in Canada currently offer excellent interest rates, often over 2%.
Below, you’ll find some general information about savings accounts and the best high-interest savings accounts in Canada.
You’ll also learn more about each savings account, its interest rates, and how using one can amplify your capabilities to earn more wealth.
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What is a Savings Account?
A savings account is a financial tool that pays interest on deposits and permits access to your money, as money in a savings account is not locked in the account.
Despite this, savings accounts are not meant for daily use. Depending on the type of savings account you use, the number of daily transactions allowed to you may be limited or costly.
That said, savings accounts are suitable for short-term or long-term savings goals, such as a vacation, wedding, down payment, or retirement.
They also serve as an excellent option for building an emergency fund, known commonly as a rainy-day fund. The purpose of any savings account is to keep savings parked or untouched until needed.
So, What Types of Savings Accounts Can You Open in Canada?
There are many different types of savings accounts in Canada, all of which come with their own purposes and advantages.
The most popular savings account in Canada is the High-Interest Savings Account (HISA). As its name suggests, a high-interest account comes with a high-interest rate.
Another popular savings account option is the Tax-Free Savings Account (TFSA). Introduced around a decade ago, the TFSA comes with a yearly contribution limit that increases and resets each year for all Canadian citizens. It allows people to earn untaxed interest.
The Registered Retirement Savings Plan (RRSP) is a registered savings account that also earns tax-free interest. It is an account designated for retirement savings. Withdrawals from this account are taxed.
What’s the Difference Between a High-Interest Savings Account and a Savings Account?
A savings account is different from a high-interest saving account solely by interest rate. Regular savings accounts usually pay an interest rate of 1.05% or lower, whereas a high-interest savings account exceeds this amount. That said, it might be more suitable to own a high-interest account over a regular savings account.
Placing your money in a HISA with a return rate of 2% or higher can keep your money’s value in pace with Canada’s current inflation rate.
Depending on the financial institution, every savings account will come with its restrictions and rules.
Are High-Interest Savings Accounts Taxable?
Interest earned in a high-interest savings account is indeed taxable; HISAs are categorized as non-registered accounts, meaning unlike the Tax-Free Savings Account (TFSA) or the Registered Retirement Savings Plan (RRSP), a high-interest savings account has no deposit contribution limit and is taxable. Other non-registered accounts or investments include GICs or stocks.
Interest earned in a high-interest savings account is considered income and taxed as so. The tax rate on interest earned is taxed at the same rate as the account holder’s income tax bracket.
The bank or credit union that issues the HISA will send the account holder a year-end tax form, similar to a tax form sent by an employer.
Best High-Interest Savings Accounts in Canada 2019 (View All)
1. EQ Bank Savings Plus Account
EQ Bank currently offers one of the best high-interest savings account rates in Canada.
The EQ Bank Savings Plus Account currently offers a competitive interest rate of 2.30%. Funds and interest are insured by the Canada Deposit Insurance Corporation (CDIC).
No minimum deposit is required to open an account. In fact, it’s entirely free to open, with no monthly contribution limits either, with unlimited Interac e-transfers and internal transfers.
An EQ Bank Savings Plus Account doesn’t come with a physical debit card or chequing account. The bank operates online only and specializes in a savings account and GICs.
EQ Bank also has an easy-to-use mobile app for your convenience.
It’s also worth noting that EQ Bank’s Savings Account is a winner of Ratehub.ca’s Personal Finance Awards for the category of the Top High-Interest Savings Account.
EQ Bank is not currently available in Quebec.
2. Motive Financial Savvy Savings Account
A division of Canadian Western Bank, Motive Financial is an online bank that serves customers through its website and mobile app. It currently offers an exceptional high-interest savings account, with tiered interest rates on savings accounts.
Clients investing $1M or less can take advantage of an interest rate of 2.80%. Investments over $1M and 1 cent receive an interest rate of 0.25%.
Motive Financial also offers a joint savings account option, along with a widely loved chequing account and GIC options that provide enhanced flexibility and options to its customers.
Motive Financial is not available to citizens of Quebec.
3. Implicity Financial High-Interest Savings Account
Implicity Financial’s High-Interest Savings Account comes with an excellent interest rate of 2.40%.
The account also comes with no monthly fee and includes unlimited transactions at no cost, with unlimited deposits and withdrawals. The Implicity Financial HISA also honours joint account options.
Interac eTransfers and withdrawals from external ATMs come with a flat rate of $1.50.
Implicity Financial is a digital credit union.
Even though the credit union is provincially insured by the Deposit Guarantee Corporation of Manitoba (DGCM), all Canadians can open an Implicity HISA.
Implicity Financial is available to all Canadian citizens.
4. Alterna Bank Savings Plus Account
Alterna Bank is a division of Ottawa-based Alterna Savings, one of Canada’s oldest Credit Unions.
The online bank offers an interest rate of 2.30%. An Alterna Bank HISA is CDIC insured, comes with no monthly or annual fees, and offers unlimited transactions and internal transfers. The digital bank offers joint account options as well
Each month, clients can use two free Interac e-Transfers to move their money from the account.
Alterna Bank customers can access any ATM in the EXCHANGE Network, which includes ATMs from the National Bank of Canada.
For more information about Alterna Bank, read our Alterna Bank Review.
Alterna Savings is available to all Canadian citizens.
5. Oaken Financial High-Interest Savings Account
Oaken Financial is a CDIC-insured bank that operates online. As a subsidiary of its parent company, Home Trust, an Oaken Financial high-interest savings account offers an interest rate of 2.30%, on deposits and comes with unlimited withdrawals and transfers.
The savings account also comes with no minimum deposit requirement. Interest is calculated daily and paid out to customers monthly.
An Oaken Financial HISA also comes unlimited Interac e-transfers, internal transfers, and no additional fees for external ATM use. Oaken Financial also offers joint bank account options.
Oaken Financial products are available to all Canadian citizens.
6. Manulife Bank of Canada Advantage Account
Manulife Bank of Canada Advantage Account offers a high-interest savings account with a promotional rate of 3.25% for the first 182 days. Once the promotional term is complete, customers can enjoy a rate of 1.50%.
An account with Manulife Bank allows customers to bank for free with a minimum savings account balance of $1,000. If you are using the account with a balance lower than this amount, transactions and e-transfers cost $1. Using an ATM outside of the EXCHANGE Network costs $1.50.
Manulife Bank of Canada proudly serves citizens of Quebec.
7. MAXA Financial High-Interest Savings Account
MAXA Financial currently offers one of the best high-interest savings account in Canada, at 2.45%. As a digital bank, a MAXA Financial high-interest savings account comes with no monthly fees and one free debit transaction per month. Interest in a MAXA HISA is calculated daily and paid to customers monthly.
The online bank offers a high-interest savings account that is insured by the Deposit Guarantee Corporation of Manitoba (DGCM).
MAXA Financial products are available to all Canadian citizens.
8. Scotiabank Momentum High-Interest Savings Accounts
Scotiabank’s currently offers several high-interest savings accounts. The Scotiabank Momentum Plus, Scotiabank Savings Accelerator Account, and the Money Master Savings Account.
None require a monthly fee from account holders. The major Canadian bank offers a mobile banking app and 24/7 customer service.
Scotiabank’s Momentum Plus account offers tiered interest rates. Higher rates apply to savings that remain untouched for extended periods. It is the most basic HISA Scotiabank currently offers.
Scotiabank’s Savings Accelerator Account offers the highest interest rate on a Scotiabank HISA.
Scotiabank’s Money Master Savings Account requires no minimum balance and allows unlimited transfers. All accounts are eligible for CDIC insurance.
Scotiabank products are available to all Canadian citizens.
9. Wealthsimple High-Interest Savings Account
You probably know Wealthsimple primarily as one of the best robo-advisors in Canada, but the wealth management platform offers much more than managing ETF portfolios and other types of trading, saving, and investment products.
One of their financial products is the Wealthsimple High-Interest Savings Account, which offers a great high-interest rate at 2%.
To make matters even sweeter, the minimum balance to open an account is $1. Additionally, there are no monthly fees or minimum deposit requirements.
A Wealthsimple HISA also offers joint accounts with a HISA.
Wealthsimple is available to all Canadian residents.
10. Motusbank High-Interest Savings Account
Motusbank is an online bank owned and operated by Meridian Credit Union. Currently, a competitive interest rate of 2.25% is earned on deposits placed in a motusbank HISA.
As a bank that operates exclusively online, Motusbank offers customers the luxury of an easy-to-use online interface and customer service via telephone. The high-interest savings account is CDIC-insured with no monthly fees, unlimited transactions, and internal transfers.
Customers banking with motusbank can use ATMs that belong to the Exchange Network.
Motusbank is available in Quebec.
11. Luminus Financial Investment Savings Account
Luminus Financial is a Toronto-based credit union currently offering one of the best high-interest savings accounts in Canada. The savings rate on the Investment Savings Account currently sits at 2.85% for the first 120 days. 1.75%.
However, the Torontonian credit union may require an in-person visit to open an account.
A fun fact about Luminus Financial is that the credit union was born in the 1950s and created by several employees of the famous Toronto-based newspaper, the Toronto Star.
12. BMO Savings Account
BMO offers three savings accounts with three different interest tiers: the BMO Savings Builder, Premium Rate Savings, and the Smart Saver.
The BMO Savings Builder Account is a high-interest savings account that offers an interest rate of 1.60%. The account requires a $200 minimum deposit each month to enjoy the minimum interest rate.
The account also offers one free transfer a month. Additional transfers or withdrawals cost $5 each.
The BMO Premium Rate Savings Account comes with an interest rate of 0.05%.
BMO savings account is available to all Canadian citizens.
13. DUCA Earn More Savings Account
DUCA is an Ontario-based Credit Union that currently offers an excellent interest rate on its Earn More high-interest savings accounts at 1.40% on deposits.
On top of this fantastic rate, DUCA’s savings account comes with no locked-in terms, daily calculated interest, and pays interest monthly.
As an Ontario-based Credit Union, DUCA is insured by the Deposit Insurance Corporation of Ontario (DICO) for deposits up to $250,000.
There’s also no minimum balance requirement. Although this is a promotional offer, exclusive to new deposits, there is no minimum deposit or monthly fee required to open, own, or operate an account.
DUCA is an Ontario-based Credit Union, and while open to all Canadians, may require an in-person appearance at one of their branches to open an account.
14. Tangerine High-Interest Savings Account
Tangerine, Scotiabank’s direct-to-customer bank, offers a high-interest savings account with an interest rate of 1.10%. New clients earn 2.75% for the first six months. The account requires no minimum balances or monthly fees.
Tangerine offers a variety of other financial products, and even allows cardholders to use Scotiabank ATMs, should they choose to open a chequing account and withdraw liquid cash.
Tangerine products are available to all Canadian citizens.
15. Simplii Financial High-Interest Savings Account
CIBC’s direct-to-consumer brand, Simplii Financial, offers an affordable, no-frills banking option to Canadian citizens. It has become one of Canada’s favourite online banks, primarily for its no-fee banking option and its high-interest savings accounts and other financial products.
Right now, a Simplii Financial high-interest savings account offers an interest rate of 1.10% on savings account deposits.
All accounts with Simplii Financial are CDIC insured and offer its customers unlimited withdrawals, account transfers, and Interac e-transfers. The best part? There are no monthly fees or minimum deposit requirements in any account.
Simplii Financial products are not available in Quebec.
16. RBC High-Interest Savings Account
Royal Bank of Canada’s High-interest Savings Account offers CDIC insurance and an interest rate of 1.00% on deposits.
The account allows one free withdrawal each month from an external RBC ATMs. Transfers between accounts are free and do not come with a delay and require no minimum deposit requirements.
RBC offers endless additional banking and investing options as well as physical branches with various financial resources.
RBC Royal Bank products are available to all Canadians.
17. National Bank High-Interest Savings Account
National Bank offers a savings account, which currently provides an interest rate of 1%.
The savings account permits unlimited transfers and one free withdrawal a month. Customers can use National Bank ATMs or ATMs affiliated with the EXCHANGE Network.
Canadians from coast-to-coast, with deposits lesser than $999,999, can enjoy the interest rate.
National Bank is available to all Canadians.
18. HSBC High Rate Savings Account
HSBC offers various saving accounts with tiered interest rates.
Deposits up to $24,999 come with an interest rate of 0.55%. High-interest savings accounts come with an interest rate of 1.05% for deposits between $25,000 and $49,999. Deposits of $50,000 or higher come with an interest rate of 1.10%.
Customers who open a chequing account with the savings account can access ATMs affiliated with the EXCHANGE Network, as well as HSBC ATMs.
HSBC is available to all Canadian citizens.
19. CIBC eAdvantage Savings Account
CIBC eAdvantage Savings Account offers interest on every dollar deposited at 1.05% on deposits over $5,000. Transactions, such as debit purchases, ATM withdrawals, bill payments, e-transfers, and branch transfers come with a fee of $5.00 each.
Like most major Canadian financial institutions, CDIC insurance is included with this high-interest savings account.
CIBC also offers the luxury of physical branches, which are a commodity and a necessity for many Canadians.
The CIBC eAdvantage Savings Account is available to all Canadian citizens.
20. TD Bank High-Interest Savings Account
TD Bank offers a high-interest savings account with no monthly fee or minimum deposit requirements, making it a suitable option for persons with larger amounts to deposit.
Interest offered in TD’s High-Interest Savings Account start at 0.50% and go as high as 1.05%. Transactions and internal transfers cost $5.
Interac e-transfers and external ATMs cost $1.50. All TD Bank accounts and deposits are covered CDIC insurance.
TD Bank offers three interest rate and deposit tiers on its savings accounts, including the TD Every Day Savings Account, which offer an interest rate of 0.05% on deposits up to $60,000.
Another account, the TD High-Interest Savings Account offers interest on 0.05% on deposits $5,000 or higher.
TD ePremium Savings Account – offers an interest of 1.05% on deposits $10,000 or higher.
As one of Canada’s largest financial institutions, TD Bank is available to all Canadians.
How to Pick the Best High-Interest Savings Account in Canada
High-interest savings accounts generally operate in the same fashion. But choosing an account that accurately suits your saving habits makes a significant impact on your wealth’s long-term growth.
Choosing a savings account with a reasonable interest rate, flexible terms and conditions, and ease of accessibility makes saving easier and more impactful.
Interest rates are an essential aspect of any financial product—especially when it comes to banking.
While getting a good interest rate is something worth keeping an eye out for, it’s also important to consider an interest rate over 2%. An interest rate 2% or over keeps up with Canada’s current inflation rate.
Having a savings account with an interest rate that matches the inflation rate keeps money consistent with inflation.
Make sure that the interest rate isn’t an introductory rate that will drop after a few months, either. Banks often offer introductory rates as a promotional offer that eventually decrease.
Withdrawals and Transactions
As iterated earlier in this article, money in a savings account isn’t money meant for daily or frequent use. Money parked in a savings account is meant for goals with longer terms.
That said, savings accounts can have limiting conditions. Finding one that reflects your habits should be a part of the saving account research process.
Making cash withdrawals or point-of-sale transactions from our savings is something many of us have to reluctantly do from time to time, in emergencies and other unpredicted circumstances.
Preparing for emergency withdrawals and transactions with a bank account that offers at least one free withdrawal or transaction per month will save money on bank fees.
Other bank accounts allow unlimited transactions from a high-interest savings account and additional features, such as free e-transfers.
Consider your personal needs and banking habits—it can save you a decent amount of money in fees.
Understanding your personal banking needs— such as fund access or cash withdrawal—will help determine what savings account works for you.
Accessibility to your money can be a determining factor in how much you are able to save. If you want accessibility to your funds, it’s important to consider how often you might need access to your funds.
Saving accounts have a history of being unflexible accounts, often not being able to facilitate simple transactions like bill payments or money transfers. The times are changing, however. More savings accounts in Canada and across the world are providing increased flexibility when it comes to saving account opens, including savings accounts with the flexibility of chequing accounts.
Compare Some of Canada’s Best High-Interest Savings Accounts for 2019
Ratehub.ca’s comparison chart can help you choose the best high-interest savings accounts in Canada, with side-by-side comparisons of Canada’s best accounts, their terms, conditions, and interest rates.
The Ratehub.ca Savings Account Comparison Chart provides an accessible means of finding the right high-interest savings account from all of Canada’s leading banks, digital banks, and credit unions.
|Want to see how your savings account compares to the rest?||Compare Best Savings Accounts|
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