Best High Interest Savings Accounts in Canada

Looking for a great Canadian savings account with high interest? Check out these 10 options for more returns and smart savings.

Want to see even more returns on your savings? Great news: many banks in Canada offer awesome rates through high-interest savings accounts (HISAs).

Check out these 10 options to start.

Motive Savvy Savings Account

Best HISA w/o Minimum Balance

Motive Financial is the online division of Canadian Western Bank, established in 2008. It has a high-interest savings account bound to catch anyone's attention.^[1]

With their Motive Savvy account, you can earn an attractive interest of 4.10%, regardless of your balance.

This account has zero fees, allowing two free monthly transactions and unlimited deposits.

Since it's designed for savings, its high-interest feature has some tradeoffs. It charges $1 for every Interac e-Transfer and $5 for additional withdrawals.

Think Motive Savvy's interest is impressive? Wait 'til you get to the next HISA.

Home Trust High Interest Savings

Highest Regular Savings Interest Rate

Home Trust's High Interest Savings Account offers a very competitive rate of 4.40%. To qualify, you must open and maintain a balance of at least $1,000. Some may consider it a drawback, but with its competitive interest rate, it could be reasonable to some.

Bear in mind there are few options at this rate with no monthly fees or lock-in periods. You can also get this same interest when opening a Tax-Free Savings Account (TFSA) or other registered accounts.

Also, this is a nominee account. It is a type of account held and registered in the name of a financial institution on behalf of the account holder. Although the account isn't under your name, you remain the beneficial owner of your investment.

In case you are hesitant, Home Trust has been in the finance industry for 46 years.^[2] Yes, they are a stable and reliable institution.

If nominee accounts aren't your thing, this next bank account may appeal to you.

Saven Financial High Interest Savings

Best Online Bank HISA

Saven Financial is a digital bank that stands out from other online banks thanks to an impressive 4.20% interest rate on its high-interest savings account.

As a depositor, you get free unlimited Interac e-Transfers and up to $250,000 deposit coverage from the Financial Services Regulatory Authority (FSRA).^[3] This protection is more than twice the standard $100,000 provided by CDIC.

Moreover, the bank offers live customer service on Saturdays. It provides convenience for clients needing help with their accounts during the weekend.

However, this high-yielding savings account is available only to residents of Ontario.

Is there a Big 5 bank that offers a good rate for savings? This next item might surprise you.

BMO Savings Builder Account

Best Big Bank HISA

A BMO Savings Builder is great for individuals who value a well-established bank. Or one with a long-standing reputation for providing reliable financial services.

Whenever you deposit at least $200 every month, you are rewarded with a bonus rate (capped at $250,000). It can help boost your overall yield to a competitive 2.50%.

This potential return is a rare offering from a Big Bank account. Hence, it's an attractive choice if you want to use a traditional bank to earn big.

Note that the base interest will apply to your balance if you don't make this additional deposit monthly. Also, you will be subject to a $5 fee if you exceed your one free monthly transaction.

Wonder if you can have your cake and eat it, too? This high-earning, flexible account might be for you.

Manulife The Advantage Account

Best Hybrid Account Interest Rate

If you're searching for an account that checks almost all your boxes, look no further than this high-earning hybrid.

Manulife Advantage is a combined chequing and savings account with a 2.85% interest. Thus, you get the best of both worlds.

At this rate, you get flexibility like free unlimited withdrawals and an Interac debit card. But you need to maintain a balance of $1,000 to enjoy these perks.

In addition, the service fees charged are quite affordable. They're even lower than other banks, making this account a more enticing choice. For example, an international ATM withdrawal would only charge $3 instead of the usual $5.^[4]

You also have weekend access to live customer agents from 9 am to 5 pm. Mandarin and Cantonese-speaking agents are also available.

CIBC eAdvantage Savings Account

Best for Incentivized Savings

How about building a consistent savings habit with a slightly high interest rate? The CIBC eAdvantage Savings Account presents a fantastic option.

You get a smart interest rate of 0.50% with a minimum $200 monthly deposit. This can encourage you to make saving a habit for longer periods.

When you open this account, you get a bonus rate for the first several months to jumpstart your gains.

The CIBC eAdvantage has no fixed fees, making it a cost-effective account. It has a tiered interest system that starts at . Note that there is no minimum balance requirement to earn this interest.

Tax-free high-interest savings account, anyone? Coming right up.

Ideal Savings Tax Free Savings Account

Best Tax-Free HISA

Ideal Savings' above-average interest rate of 3.65% deserves a second look.

Ideal Savings Tax Free Savings Account doesn't offer the bells and whistles of more established banks, such as a fancy mobile app and branded debit cards. Despite this, it does come with the benefit of non-taxable interest earnings.

However, the bank's customer support is through email only, which has a response time of 2 business days.

If you need to withdraw your funds, you can do so through an online fund transfer or cheque. You will be charged $5 for every withdrawal.^[7]

Did you know that the HISA rates of some credit unions are much higher than regular banks? Check out this next HISA account.

Outlook Financial High Interest Savings

Best Credit Union HISA

The High-Interest Savings Account from Outlook Financial is desirable for several reasons. One is the unconditional high-interest rate: no attached fees and deposit minimums.

Also, the insurance by DGCM will cover whatever amount is in your balance should the company fold. This was seen during the bank's merger with Implicity Financial. At that time, no client funds were impacted negatively.

Outlook Financial requires clients to be Assiniboine Credit Union members, their parent company.

But for only a $5 membership fee, banking with a credit union can be a refreshing change of pace.^[10] Note that you can refund this amount once you cancel your account.

Who says only adults can enjoy high interest on their savings? Kids get their own cake slice, too, with this next option.

Steinbach Credit Union SaveWise

Best HISA for 14 and Under

The SCU SaveWise account is great for kid savings, which can encourage them to save at an early age. Even though the 5.70% interest rate applies only to the first $2,000, the succeeding rate is still high.

As soon as the kid turns 15, the account will convert into a regular savings account. At this point, they will continue to enjoy competitive rates (SCU Monthly Savings Account interest rate is 1.90%).

You may also appreciate features like the ability to withdraw funds whenever needed. This can be easier when you pair it with a SpendWise chequing account.

Moreover, you can talk to a customer agent even on Saturdays.

Would you believe that you can earn money while saving and spending? With this next unique account, it is possible!

Neo Money

Best High-yield Cash Card

Neo Money is excellent for those who prefer a bank account that rewards them for spending and saving.

With Neo Money, you can earn an average of 5% cashback rewards on purchases made with your debit card. At the same time, you get a competitive interest of on the money you save.

This account is entirely digital. Thus, you can only access your funds and manage your account through the Neo mobile app. It is user-friendly, allowing you to set automatic savings goals and track spending.

But despite its digital nature, mobile cheque deposit is not yet available on their app.

Furthermore, Neo Financial has tapped the Mastercard ATM network to provide wider accessibility without service fees.

What Is a High-Interest Savings Account?

A high-interest savings account is a type of bank account offering a more favourable interest rate than a regular savings account.

The rate applies to the entire account balance, typically calculated daily but posted monthly on your HISA.

Think of a HISA in terms of a high-performance sports car. It offers better speed and performance than a regular car. Similarly, a HISA offers better gains than a traditional savings account.

However, a sports car may not be the most fuel-efficient for everyday driving. In comparison, a HISA won't always provide the best rate of return over other investment options.

Thus, it is crucial to consider your financial goals carefully before choosing a HISA.

High-Interest Savings Account vs. Tax Free Savings Account
While high-interest savings accounts and tax-free savings accounts may seem similar, they differ in tax and placement. Earnings from HISAs are subject to taxation.

TFSAs, on the other hand, can have the high-yield feature of HISAs but without tax reporting.

High-Interest Savings Account vs. Registered Retirement Savings Plan
For high-interest savings accounts, you pay taxes on any interest earned. Registered retirement savings plan contributions are tax-deductible.

Note that its earnings remain exempt from tax unless you withdraw them from your account.

High-Interest Savings Account vs. Guaranteed Investment Certificate
High-interest savings accounts and guaranteed investment certificates differ in liquidity and interest.

With a GIC, you must be willing to commit your money untouched for the agreed-upon time. You can earn interest rates that are usually higher than HISAs.

What is 5% interest on $1,000?

If you have $1,000 invested with a 5% interest rate, you will earn $50 interest in a year. This is based on a simple interest computation.

Note that daily compounding is applied to most savings accounts. Using the APY calculator below, you will get approximately $51.26 in compounded interest for one year.

How Does a High-Interest Savings Account Work?

In a high-interest savings account, deposited funds generate interest by allowing the bank to use them for loans. Interest rates usually range between 0.5% and 3%, sometimes much higher.

Think of it like planting a seed in a pot. Much like a well-nurtured plant, a HISA helps your savings grow slowly into a larger amount. This is due to compound interest, essentially your money's fertilizer.

HISAs often do not charge fixed monthly fees. This is because they are intended for people to park their money for extended periods. However, some HISAs may have transaction fees and limits on withdrawals and transfers.

How to Open a High-Interest Savings Account

No need to stress about opening a high-interest savings account. It's actually an easy and pretty straightforward process for most banks.

To open an account, you should:

• Be the age of majority in your province or territory
  
• Have a permanent address in Canada
  
• Provide personal information, like your full name, date of birth, and others
  
• Present identification and SIN for tax purposes
  
• Have an email address if opening an account with an online-only bank

If you're opening an account in person, choose a bank with a physical branch near you.

How to Use a High-Interest Savings Account

Meanwhile, here's how to use your high-interest savings account effectively:

1. Consider setting up automatic deposits to make saving easier and more consistent.
   
2. Use it to save for short-term goals such as an emergency fund or home down payment.
   
3. Avoid using your HISA for everyday spending. Instead, open a separate chequing account for daily transactions.
   
4. Monitor your account regularly to ensure you are earning the advertised interest rate.
   
5. Consider moving your money to a higher-yielding account if your interest rate drops.
   
6. Be aware of any withdrawal restrictions to avoid penalties. These can eat up your gains if occurring frequently.

How to Choose a High-Interest Savings Account

Banks and financial institutions have different rules for their high-interest savings accounts. Here are some things to consider when figuring out which HISA is a good place to stash your cash.

• Interest rate
  See if the account has a competitive interest rate. In other words, it should be about the same, if not higher, than other banks.

• Financial goal
  If it's a short-term goal, then HISA would be a good option, especially if you want to top up your savings whenever possible.

• Fees
  Most banks offering HISAs don't have fixed fees. However, they may have service fees, especially on debits and withdrawals.

• Deposit amount
  Many high-interest savings accounts still need minimum balance requirements to earn interest. The amounts they require will vary but usually start with $1,000.

• Accessibility
  Check for ATM access or a branch location where you can transact directly. Online access is important not just for moving funds but also for monitoring.

• Reputation
  Choosing a reputable bank will give you peace of mind that your money is in trustworthy hands. Such a bank would have a good track record of serving customers well.

Are savings accounts safe?

Savings accounts in banks and credit unions are generally considered safe. They are insured by the CDIC up to $100,000 per depositor, per category.

In the case of credit unions, they usually have their provincial insurance programs like the Deposit Guarantee Corporation of Manitoba and Deposit Insurance Corporation of Ontario.

Some of them even offer coverage beyond CDIC's amount. As an example, DGCM guarantees deposits without limits.

Bottom Line

There are many high-interest savings accounts you can park your money in. Each one has sweet deals to boot. They could range from waived transaction fees to incentivized monthly contributions and others.

Choosing a high-interest savings account that suits your needs is always best. A zero or low minimum balance requirement or easy access to your cash to avoid additional charges would be must-haves.

Keep in mind the important things, such as interest rates, fees, and security, to get the most out of your savings.

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