Features of chequing without any of the feesget this rate
Simplii Financial ™6.00%
Earn 6% interest for 5 months on your first Simplii Financial High Interest Savings Account. Limits apply. Offer ends April 30, 2024.get this rate
No monthly or annual feesget this rate
Oaken Financial Savings Accountget this rate
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to Canada’s top financial institutions
Natasha Macmillan, Business Unit Director - Everyday Banking
Our guide to the best savings accounts in Canada
A savings account is a common type of deposit bank account that can earn interest on it's balance. This type of account is perfect for specific goals such as an emergency fund, wedding or an upcoming expensive purchase.
There are a few things to look for when searching for a new savings account. We've outlined these key features below.
Top saving interest rates in Canada
Best savings accounts in Canada
Why you should open a savings account
Savings accounts typically pay a higher rate of interest compared to chequing accounts. Major Canadian banks pay 0% interest on chequing accounts, whereas savings accounts can pay between 1.5% - 2.5%.
With a savings account, you can separate money that is in surplus to your day-to-day requirement and earn a little extra.
What to look for in a savings account:
Rate of return
When you deposit money in a savings account, you earn interest on the amount you deposit. Some accounts offer everyday high interest rates, and some offer “teaser” rates that start off high and then drop off after a certain length of time. Ignore flashy looking interest rates that don’t last for long, and look instead for accounts that offer the highest first-year return.
Some savings accounts charge fees for transactions including deposits, withdrawals, and transfers to and from other accounts. Look for savings accounts that offer a number of free transactions every month, especially if you know you’ll be making a lot of transactions.
There are lots of great high-interest savings accounts available that don’t charge monthly fees even if you don’t have a lot of money saved. Don’t get tricked into thinking you need to pay a monthly charge for the privilege of earning a high interest rate on your savings.
When you deposit money in a bank account in Canada, it’s usually federally protected by the Canadian Deposit Insurance Corporation (CDIC). Some financial institutions aren’t covered by CDIC insurance, however, so make sure you know how your money is protected.
Sometimes banks will offer extras to stand out from their competitors. Keep an eye out for special offers like introductory interest rates and cash bonuses, but be aware that another savings account without those gimmicks might earn you more interest in the long run. Better extras to look for are free transactions, free Interac® e-Transfers, and better online/mobile banking experiences.
Choosing a savings account that's convenient and has your banking preferences in mind is important. Things to keep in mind before choosing a new financial institution:
- If you prefer going into a physical location, ensure you bank with an institution with physical branches.
- If you prefer online banking, it may be wise to go with an online-only bank. If this is the case, ensure the digital experience offers everything you may need, including customer service for questions.
- Many people enjoy having their chequings and savings account with the same financial institution
- It's important to ensure that when needed, you're able to easily withdraw money. Can you use a debit card at an ATM or do you need to transfer funds to another bank prior to withdrawal?
What are the benefits of a savings account?
A savings account is a kind of bank account used to safely store and grow your money by earning interest on your deposits. Unlike a chequing account, which is typically used for day-to-day transactions like paying bills, savings accounts are meant as a short-term investment vehicle to help grow your savings conservatively with absolutely no risk. The cash you deposit in a savings account is “liquid”, which means your money is always accessible and can be withdrawn at any time. It’s why a savings account is an ideal place to set aside extra money for a vacation, upcoming big-ticket purchase (like a new TV), or an emergency fund.
What Canadian Bank has the best high interest savings account?
The best HISA for 2023 belongs to Saven Financial which had one of the highest interest rates on the market throughout 2022. In addition to their excellent rate, this savings account includes:
- No monthly fees
- No minimum balance requirements
- Free transfers for withdrawals and deposits
- User-friendly online portal
Check out Ratehub's Personal Finance Award winners for 2023 to see our opinion of the best accounts on the market today.
What types of savings accounts are available?
There are a number of different types of savings accounts available to Canadians, each with a different intended purpose. A few different types of savings accounts are:
High interest savings accounts
High interest savings accounts are savings accounts that pay a high rate of interest compared to other savings accounts available on the market. In Canada, you’re required to pay income tax on the money you earn in a non-registered high-interest savings account.
Tax-free savings accounts
The name tax-free savings account (TFSA) actually refers to a tax shelter that can be used with a number of different investment products, but there are savings accounts available as a TFSA. TFSA savings accounts typically offer a lower interest rate than high interest savings accounts, but as the name suggests interest earned is tax-free. You can only open a TFSA if you're a Canadian citizen age 18 or over. TFSAs also have a contribution limit.
Youth savings accounts
Many banks and financial institutions offer special savings accounts just for children. Youth savings accounts sometimes offer special incentives and educational tools to teach kids how to save money and how to bank.
Seniors savings accounts
Less common than children’s accounts, seniors savings accounts can offer special interest rates or reduced fees for Canadians who are 65 and over.
Will saving account interest rates rise with Bank of Canada rates?
The Bank of Canada's overnight rate dictates changes in the prime rate, which then influences the amount of interest earned on HISAs and investments such as GICs.
With the upward movement in the Bank of Canada’s overnight target rate in 2023, deposit rates have slowly increased. Big banks are slower to pass these increasing interest rates on to consumers, but usually will start to increase their high interest savings rates when there is competitive pressure from credit unions or smaller institutions.
Are savings accounts taxable in Canada?
Yes, in Canada you have to pay income tax on any interest you earn in a savings account. You'll claim this interest income, along with other personal income on your tax return.
It's important to note you don't pay any taxes on the interest earned in a tax-free savings account (TFSA).
Natasha Macmillan, Business Director of Everyday Banking
With over a decade of experience in the finance industry, Natasha works closely with Canada's top financial institutions - from banks to credit unions - to help Ratehub.ca's 1,200,000 monthly users get matched with the right banking products. read full bio
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