Best High-Interest Savings Accounts in Canada in 2023
When it comes to saving, there’s a better way than just shoving your money into a regular savings account for safekeeping. If you do it right, you can actually earn money while you save — and not just a penny a year.
So we found the high-interest savings accounts with the best interest rates in Canada to help you decide which banks are worth joining, but we didn’t stop there. We also scoped out the accounts with the best terms like the lowest minimums, fewest monthly fees, and most perks.
Saving more really can be as easy as choosing the right account. Find yours here.
In This Article:
5 Best High-Yield Savings Accounts
- EQ Bank Savings Plus Account
- Neo MoneyTM
- Scotiabank MomentumPLUS Savings Account
- KOHO Earn Interest
- Oaken Savings Account
EQ Bank Savings Plus Account
Features
- APY: 2.50%*
- Minimum opening deposit: $0
- Minimum balance: $0
- Monthly fee: $0
- Other: Unlimited free Interac e-Transfers®, Electronic Funds Transfers, and bill payments
Overview
There’s more to this high-interest savings account than just a great rate. In exchange for a high APY, the EQ Bank Savings Plus Account asks for almost nothing in return. There are no minimum balance requirements, monthly fees, additional foreign currency transaction fees, or transaction limits. You can even use this account for bill payments without paying any transfer fees or penalties for too many withdrawals. In other words, no fees to eat into your interest earnings.
But one of the best features of this account is the EQ Bank Card. This is a reloadable prepaid Mastercard® that can be used to make unlimited free withdrawals (with reimbursements when you use out-of-network ATMs) and earns 0.5% cash back on everything. Plus, 2.50%* interest on whatever you load onto the card until you spend it so it won’t stop earning when you move it from your savings account.
Open an EQ Bank Savings Plus Account with whatever you’ve got and watch your money grow.
* Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.
‡‡ Equitable Bank is a member of CDIC, which means your deposits with Equitable Bank and EQ Bank are eligible for deposit insurance from the CDIC.
Neo MoneyTM
Features
- APY: 2.25%
- Minimum opening deposit: $0
- Minimum balance: $0
- Annual/Monthly fee: $0
- Other: Unlimited free Interac e-Transfer®, Electronic Funds Transfers, and bill payments, Neo MoneyTM card
Overview
The Neo MoneyTM account is another savings account with a competitive interest rate and no strings attached. Whether you deposit $5, $500, or $5,000, you’ll earn the same APY on all of it. This digital account is beginner-friendly with helpful features like auto-pay for your bills and unlimited free transactions. And of course, there are no deposit minimums or fees.
This savings account is great on its own but even better when you pair it with a Neo CardTM, a cash back credit card, to earn rewards on your spending and pay off your balance. You can also cash out your rewards directly into your Neo Money account. With this card, you can split bills with friends, family members, and roommates by requesting payment for different transactions. Then, any transfers you receive are automatically sent to your savings.
Your Neo Money account includes the Neo MoneyTM card – a card that’s better than debit and lets you earn instant, unlimited cashback while not impacting your credit. This functions like a prepaid card, except you don’t have to manually load to spend with since it utilizes the funds already in your Neo Money account. Earn an average of 5% cashback at thousands of partners (we’re talking 10,000+ partner locations!) and as a Welcome Offer you’ll get up to 15% cashback on first-time purchases. That noted average is based on current offers at select partners, varying per offer and partner. Plus, there’s no annual or monthly fee to worry about.
Sign up for Neo Money today using our link and get a $5 bonus!Scotiabank MomentumPLUS Savings Account
Features
- APY: 1.50% (promotional rate of up to 5.00% for 5 months1)
- Minimum opening deposit: $0
- Minimum balance: $0
- Monthly fee: $0
- Other: Unlimited free Interac e-Transfers† + banking and investing perks with packages
Overview
If you know anything about Scotiabank, you’re probably not surprised to find their name on this list. This is a huge traditional bank with untraditional products, and that goes for the savings accounts too. Our personal favourite, the MomentumPLUS Savings Account, earns a more than respectable base interest rate as well as an outstanding promotional rate.
This product works a little differently than the others, so settle in. One option is to open just the savings account, which isn’t a bad way to go. You’ll earn more the longer you save without fees or minimums. Another option is to open a package account to enjoy more banking features and benefits as well as higher savings interest rates.
Both the Ultimate Package and the Preferred Package with Scotiabank offer benefits for the MomentumPLUS Savings Account. These are chequing account packages with investing, banking, and saving perks. Take a look at what these two options offer below.
- Ultimate Package – $350* welcome bonus plus earn up to 5.00% on your MomentumPLUS Savings Account for 5 months1, unlimited debit transactions2, credit card fee waiver2, Scene+ rewards points2, 10 free equity trades with Scotia iTRADE, Ultimate rates on select GICs, and more
- Preferred Package – $350* welcome bonus and up to 4.95% interest on your MomentumPLUS Savings Account for 5 months1, unlimited debit transactions2, credit card fee waiver2, Scene+ rewards points, Preferred rates on select GICs, and more
The MomentumPLUS Savings Account itself does not come with a monthly fee, but you may pay a monthly maintenance fee for your package if you do not meet the minimum balance requirements to waive it. You must maintain a daily closing balance of $5,000 in your chequing account or a combined $30,000 across your chequing account and MomentumPLUS Savings Account for the Ultimate Package and a daily closing balance of $4,000 in your chequing account for the entire month for the Preferred Package. If you don’t meet these requirements, you’ll pay $30.95 a month for the Ultimate Package or $16.95 a month for the Preferred Package.
Interest rates for this high-interest savings account depend on three factors: how long you’ve had the account, which package you have (if any), and whether or not you qualify for the promotional interest rate.
The base interest rate on all accounts is 1.50%, but you can qualify for a 0.05% boost with the Preferred Package or a 0.10% boost with the Ultimate Package. That brings the potential interest rate to 1.55% or 1.60%. You can also earn a “Premium Period” interest rate boost for every 90 days you have the account – 0.85% extra after 90 days, 0.90% extra after 180 days, 1.00% extra after 270 days, and 1.15% extra after 360 days. Premium Period Interest is calculated daily, paid at the end of the applicable Premium Period.
To qualify for the promotional welcome bonus rate boost of an additional 2.25%, all you have to do is open an account by June 30, 2023, and make a deposit of any amount. Then, your balance will earn the boosted rate for 5 months from the date of opening the account. If you’re following along, this brings the total possible interest rate to 5.00%1 with the welcome boost.
The MomentumPLUS Savings Account is a unique savings product with a lot of quirks and perks besides a fantastic rate. Consider signing up for the Ultimate Package or Preferred Package.
* For Ultimate Package: To qualify, certain conditions must be met. Offer ends April 30th, 2023. Visit here for full terms.
* For Preferred Package: To qualify, certain conditions must be met. Offer ends April 30th, 2023. Visit here for full terms.
1 Conditions apply. Actual interest rate will vary based on the savings period (the Premium Period) that applies. Visit scotiabank.com/mpsa to learn more.
2 For Ultimate Package: Conditions apply. Visit here to learn more.
2 For Preferred Package: Conditions apply. Visit here to learn more.
KOHO Earn Interest
Features
- APY: 0.5% – 2%
- Minimum opening deposit: $0
- Minimum balance: $0
- Monthly fee: $0
- Other: Unlimited free Interac e-Transfers
Overview
If you’re interested in a hybrid account with more than just a high yield, this one is for you. With KOHO Earn Interest, your money will earn interest when you’re not using it and cash back when you are. This isn’t strictly a savings account because it offers chequing and even credit-building features.
There are three different full-service subscription plans: Easy, Essential, and Extra. You’ll pay a monthly or annual fee for the Essential or Extra plan, but each subscription level offers different rates and perks including cash back when you use your card to make purchases. Here’s a breakdown of what each plan costs and the interest and cash back it earns.
- Easy – $0 a month, 0.5% interest on your balance with no minimum deposit requirement and 1% cash back on groceries, bills/services, and up to 5% extra cash back when you shop with partnered merchants
- Essential – $48 (or $4/month), 1.5% interest on your balance with no minimum deposit requirement required and 1% cash back on groceries, bills/services, eating & drinking with 0.25% cash back on everything else, and up to 5% extra at partnered merchants
- Extra – $84 (or $9/month), 2% interest on your balance (no minimum deposit requirement) and 2% cash back on groceries, eating & drinking, and transportation with 0.50% cash back on everything else and up to 6% extra cash back when you shop with partnered merchants
All of these plans include the option to enable RoundUps to save faster and can optionally include Credit Building by KOHO as well for a fee.
This account may not be a good fit for everyone and it doesn’t offer the best rates, but it can be beneficial to anyone looking for a two-in-one spending and saving solution with no or low fees.
Oaken Savings Account
Features
- APY: 3.40%
- Minimum opening deposit: $0
- Minimum balance: $0
- Monthly fee: $0
- Other: Unlimited free transactions
Overview
Last but not least, we thought the Oaken Savings Account deserved your attention for a moment. The APY speaks for itself, and although this account is otherwise basic, we don’t see that as a drawback. All accounts are CDIC insured either through Home Bank or Home Trust Company (the choice is up to you) and interest is calculated daily and credited monthly.
This is a no-frills account for keeping saving simple. It does not offer cash access in the form of a debit card and does not permit Interac e-Transfers, so if these things are important to you, check out the other options we’ve covered.
Oaken Financial is also a good choice for anyone looking to open a GIC, as these accounts very often have some of the best rates. There are both registered and non-registered options, all of which only require a minimum deposit of $1,000. And if you do decide to open a GIC with Oaken, you can use money from your Oaken Savings Account to fund it.
What Is a High-Interest Savings Account?
High-interest savings accounts or HISAs offer the most competitive interest rates, often much higher than the average savings account with a traditional bank or credit union.
For example, a HISA might have an interest rate of over 3.00% while a regular savings account – say, one you opened with your regular bank or credit union – may only pay you 0.10%. Depending on how much money you have to deposit, this could make a huge difference in your finances over time.
Because the interest rates on high-interest savings accounts are usually significantly better than those on other accounts, these are ideal for short-term savings and emergency funds because they will earn more dividends on the cash you put away. A HISA is a hands-off way to safely and steadily grow your money.
Here are a few other distinguishing features of HISAs vs. regular savings accounts:
- While some brick-and-mortar banks offer HISAs, the best rates are usually found at virtual (online-only) banks.
- HISAs are less likely to charge monthly maintenance fees or have minimum deposit/balance requirements than other savings accounts.
- Many HISAs only permit electronic funds transfers, Interac e-Transfers, and other digital transfers. You may not be able to make cash deposits and will often pay a fee for ABM or ATM withdrawals.
- HISAs may include additional perks not commonly found with traditional savings accounts such as unlimited withdrawals and welcome bonuses.
How Much Can You Earn in Interest?
Wondering how much you can really make with a high-interest savings account? This savings calculator can help you see how much interest an account would collect in compounding interest in any given scenario. You can plug in different variables for the interest, initial and monthly deposits, and the number of years you’re saving to find out how long it would take you to reach one of your goals.
If you’ve already got a savings account, try plugging in the rate you earn on that and comparing it against one of the rates from this article to see how much cash you could be missing out on.
Pros and Cons of High-Interest Savings Accounts
Compared to other types of financial accounts, high-interest savings accounts present some distinct advantages. But they’re not without disadvantages too.
Pros
- Better interest rates than regular savings accounts
- Steady returns
- No risk of losing your money
- Easy cash access (high liquidity)
- Fewer transaction fees and other charges
Cons
- Transaction limits
- Deposit and withdrawal limits (i.e. no cash deposits)
- Lower interest rates than many types of investment accounts
High-Interest Savings Accounts Compared to Alternatives
As you’ll quickly see, high-interest savings accounts serve a pretty specific purpose. And depending on what financial goals you’re working toward, they may be a better or worse choice than other bank and investment accounts.
Let’s see how HISAs compare to a few common alternatives.
HISAs vs. Money Market Mutual Funds
A money market mutual fund (often just shortened to money market fund) is a type of investment vehicle that invests in high-quality, short-term debt securities such as corporate bonds or notes, treasury bills, and commercial paper.
The exact investments vary from one money market fund to the next but are very often some form of cash equivalent. These vehicles typically choose securities that are set to mature soon, often a year or less into the future, that are highly stable and therefore present low risk.
Money market funds earn interest that is usually distributed monthly. While it is technically possible to lose some of your investment in a money market fund, it is not very likely. The investments chosen for these accounts are far more stable than other asset classes.
HISAs and money market funds are both intended for shorter-term saving and should not replace your long-term investing, but you may choose one over the other depending on which one has the highest interest rates and lowest fees. Both can offer passive earnings in the form of interest and high liquidity so your cash is always readily available to you if you need it.
Read more: How to Start Investing the Smart Way
HISAs vs. Guaranteed Investment Certificates
As the name implies, Guaranteed Investment Certificates or GICs are a type of financial account that guarantees your principal and interest upon maturity.
With a Guaranteed Investment Certificate, you deposit any amount of money you’re comfortable with “locking up” for anywhere from six months to twenty years. This period of time is referred to as the term. While your money sits in the certificate, it earns a fixed or variable interest rate depending on the type of account that is calculated as a percentage of your principal. Usually, you are not permitted to add more money to a GIC after opening and may pay a hefty penalty for taking some or all of your cash out before it reaches maturity.
You can purchase GICs from most financial institutions including banks and credit unions. To choose one, consider the interest rate, available terms to choose from, deposit requirements to open and earn interest, and types of accounts. Both online and brick-and-mortar banks may offer competitive GICs, so keep an eye out for promotional rates and terms that work for you.
With both GICs and HISAs, it is not possible to lose money. But while HISAs are better for near-term savings goals, GICs are most profitable the longer you have to wait and tend to have much higher rates than HISAs. So if you have a chunk of money you don’t expect to use for many years, consider a GIC to earn the best interest rate on that cash possible.
GICs also tend to have higher deposit requirements, so be mindful of this when choosing between the two.
Fun fact: In the U.S., these are very similar to certificates of deposit or CDs.
Read more: Best GICs in Canada for 2023
HISAs vs. Tax-Free Savings Accounts
Tax-free savings accounts are a type of savings account that grows tax-free whether from interest, dividends, or capital gains. Anyone who is the age of majority in their province is eligible to open a TFSA and these are commonly offered by banks, credit unions, and investment brokers.
There are many types of TFSAs and some offer much higher liquidity than others. For example, TFSA savings accounts are comparable to high-interest savings accounts in terms of cash access while TFSA mutual funds are investment accounts that shouldn’t be touched for several years.
A TFSA may earn guaranteed interest on your balance or capital gains on your investments, depending on what type of account you open. Bonds, stocks, and mutual funds are a few types of investments often used in TFSAs. If you choose a self-directed account, you will select these investments for yourself. Many offer prebuilt portfolios.
Like a high-interest savings account, a TFSA is what you make of it. You can use it to save for any goal or purpose and are not required to use the money in any certain way. That said, many Canadians use them for retirement, However, there are lifetime and annual maximums on contributions you can make to a TFSA. The contribution limits on this type of account tend to change every few years.
TFSAs are tax-advantaged in that you won’t pay taxes when you withdraw your principal and earnings. HISA earnings, on the other hand, are taxed. Rates vary for both, but TFSAs generally have higher APYs than HISAs.
Tax-free savings accounts are ideal for long-term saving while high-yield savings accounts are ideal for short-term saving. It is common (and wise) to have both types of accounts, so you don’t really have to choose one or the other.
Read more: Best TFSA Savings Accounts for 2023
How To Choose a Savings Account
With interest rates ranging so dramatically on high-interest savings accounts, it’s vital to shop around to get the best rate you can.
But what other factors should you consider when trying to identify the high-interest savings account in Canada that best suits you? After all, APYs are subject to change, so interest rates alone aren’t enough to make the right decision.
When comparing HISAs, consider the following features.
Deposit Requirements
When researching savings accounts, be sure to check out the deposit and balance requirements. Many of the best savings accounts do not have any deposit or balance minimums you need to meet in order to earn the highest interest rate, but some do.
Be sure too that an account won’t penalize you with a fee or account closure if your balance drops below a certain threshold. This is less common in high-interest savings accounts but still possible.
Transaction Limits and Types
Savings accounts may restrict the number of transactions you can make in any given month, and it’s important to know these rules upfront.
Here are some things to look into:
- How many free transactions will you get per month?
- What are the fees associated with exceeding this limit?
- What types of transactions are permitted? (i.e. Interac e-Transfers®, electronic funds transfers, or both?)
All of our favourite HISAs in this list allow for unlimited free transactions. This is convenient when you need to access funds for an emergency or just want to use your savings for some bills.
Fees
Savings accounts can charge a variety of different fees from monthly maintenance fees to transfer and penalty fees. These will cut into any interest earnings you make and, more often than not, just aren’t worth paying.
If you’re looking to avoid fees, online banks are typically the way to go. But many traditional banks offer fee-free accounts as well.
Funding and Withdrawing
How you put money in and take it out of a savings account might not seem like it would matter much, but these choices can make a huge difference when it comes to actually setting up your account – as well as affect how likely you are to keep using it.
For example, can you make cash deposits anywhere? Set up direct deposit to have a percentage of your paycheck sent to your savings automatically each pay period?
Sometimes, the only option available is to make an electronic funds transfer from a linked bank account. If this works for you, great. If not, look for an account with more flexibility.
Saving Features
Though not a requirement of a good account, we like to see features and tools that can help you save more, like automatic recurring transfers, RoundUps, interest boosts, and account bonuses. These are especially important if you’re starting to save for the first time and still working on making it a habit.
How To Open a High-Interest Savings Account in Canada
To open a high-interest savings account, you’ll need to fill out an application in-person at a local branch (if you’ve chosen a bank with branch locations) or online.
The first step of applying is to verify your identity. This will include providing your original ID papers containing your name, date of birth, and address.
- If you’re a Canadian resident, you can present any government-issued documents you have or official records such as tax assessments and statements from other bank accounts
- If you’re not a Canadian resident, you can present your passport as well as immigration papers if you have them and a valid Social Insurance Number
After this, you’ll answer any remaining questions from the application and provide your contact information. If you’re approved, your bank will reach out letting you know it’s time to fund your account. If the HISA you’ve chosen has a minimum opening deposit requirement, make sure you meet it when funding.
Applying for a savings account does not impact your credit. You’re not likely to be turned down for an account unless a bank is unable to verify your identity or you are believed to be opening an account illegally.
Read more: Everything You Need to Know About Money as a New Immigrant to Canada
Should You Get an HISA?
Most everyone could benefit from opening a high-interest savings account. These accounts are easy to get and many don’t require you to have much money to get started, so there are few reasons not to just take a couple of minutes to sign up for one.
Especially if you have a big financial goal for yourself – such as saving for a house down payment, getting out of debt, or putting your child through college – a savings account can help you get there. A good interest rate won’t earn you enough money to replace investing or make you rich, but it can support your efforts and slightly offset the effects of inflation.
Even if you don’t have any particular goals you’re working toward right now, it’s a good idea to set aside a few months’ worth of living expenses in a separate account from the rest of your money to protect yourself against emergencies.
FAQs
Are Savings Accounts Safe?
As long as you choose a high-interest savings account from a reputable bank or financial institution, your money is extremely safe. All of the accounts we’ve chosen are insured by the Canada Deposit Insurance Corporation for up to $100,000 per depositor‡‡. CDIC coverage means that if the bank that holds your money fails, you’ll get reimbursed for the amount you deposited, plus the interest you earned already (up to the $100,000 maximum).
Unlike investments that are susceptible to fluctuations in the stock market, HISAs are stable. With a HISA, your money won’t go anywhere.
Are Savings Accounts Taxable?
In Canada, interest from savings accounts counts as taxable income. So you will pay taxes on whatever you earn just like you would pay taxes on your paycheck. You will use a T5 to file your interest earnings and be taxed at the regular rate.
Note that you only pay tax on the interest your account earns, not on the money you deposit or withdraw.
Will I Be Penalized for Withdrawing from an HISA?
Maybe. That depends on the rules and regulations of your bank. Most banks will let you make a certain number of withdrawals each month, fee-free, although you might have to pay a fee for the method of the withdrawal.
But some banks, like digital banks, offer unlimited withdrawals without any penalties or deductions. Bear in mind that you’ve opened a HISA in order to save money, and every time you make a withdrawal, you’re reducing the total amount of money you can earn interest on. Unless you’ve chosen a hybrid account with all the trappings of a chequing account, keep your withdrawals to a minimum when possible.
Summary
Whatever you do, don’t settle for an underwhelming savings account. Free money is yours for the taking, and all you have to do is choose a high-interest savings account.
Start earning interest today and growing your money with less effort.
Article comments
Saven Financial offers 1.55% on their HISA, regular rate not promo
Hi Victoria,
Thanks for the heads up. More saving options are always welcome!
You got it wrong. Tangerine does not charge for interac email transfers and you can also negotiate rates on your HISA accounts about every 3 months. I currently get 1.4%, but will likely be reduced again this month.
Hi Alan,
Thanks for spotting this. We’ll be sure to get this updated. Also appreciate the tip on negotiating interest rates on the HISA. Good luck on your next negotiation.
Hi,
I am new into getting the most out of my finances. I’m currently with TD and have the basic savings account. I want to save 20k for a period of time (a year or more) and wanted to know what the best options are. Thank you for all the information ?
Hi Tenzing,
I would get that money into a high yield savings account with the largest interest rate you can find until you can invest it. Perhaps a tax-free savings account, but these don’t have the highest interest rates. What you invest it in depends on whether your goal for the money is short-term or long term. Pick an investment vehicle that matches your goals. If it is short-term, try something that’s moderate to low risk but if it’s longer term try something that’s higher risk and higher return. Usually, the greater the return, the more volatility in the investment, so even though you get a greater return, you might lose money in the short-term to gain overall in the long-term. I would speak to a financial advisor about your specific situation and they can help you explore your options more specifically according to your investment goals.
There are some high-interest accounts that I have been dealing with and they are covered by CIDC or Credit-Union insurance. They are: EQ Bank (1.50%); Motive Financial (1.55%), Alterna Bank (1.20%); Oaken Financial (1.25%). I have all of these accounts, and I’m very pleased. The best feature is that you can withdraw all, or a portion, of your money at any time.
Hi Weasie,
Thanks so much for the recommendations. Hopefully Tenzing sees your comment and does some research for themselves based on these accounts to find the one that’s right for them.
Hi,
The savings calculator up there shows interest to be compounded monthly. But one earns interest annually with banks. So how does the calculator help us with practical numbers?
Hey Rob! I am also new to this forum and seeking options for Daily Interest Savings returns.
I agree with Nate’s comments regarding liquidity and access to Reps and Services when considering your larger Banks, however, all of that comes at a cost to you (the depositor) which can be anywhere from 50% to 75% lower savings rates. Most institutions are protected by CDIC. In your case, you could open several accounts (individual and joint) including TFSA and spread your deposits to the safe CDIC limit.
Multiple accounts are by CDIC.
The convenience of walking in to your local Bank branch to discuss your savings deposits will not make up for the $400 to $600 in lost interest.
Simplii Financial is currently offering a Savings rate of 2.8% on new deposits.
Give them a call for details.
I am new to Greedy Rates & very much appreciate your incite & comments.
I will receive an inheritance shortly of aprox $ 500K & would like to park it some where.
I open a TFSA mutual fund last year of $1,200 so perhaps I should max this out as I will be retiring late 2020.
I have open a HISA with LBC 3.3% with no deposit yet. Any info on them?
Could you recommended where to place the balance with retirement in mind?
Hey Rob,
Appreciate you coming to GreedyRates with your questions and concerns. If you’ll receive a larger inheritance like that, then we suggest you park it with one of the biggest and most established Canadian banks—one of the “Big Five”, if you will. Any of the following banks, BMO, TD/MBNA, CIBC, or RBC will be a trustworthy custodian of your money and help you put it in the types of accounts that will protect and maximize its growth. It’s important to make use of tax-advantaged accounts like the TFSA and RRSP for long-term yield across assets like stocks, bonds, mutual funds, ETFs and more.
You should also open another HISA (not LBC) and a chequing account to go with it for greater access to your money. After all, access is what the Big Five provide. There’s no messing about with online interfaces or trying for hours to get ahold of someone over the phone. You get to go in, see your account manager or teller, pick from a wealth of investment instruments and that’s that. Let us know which bank you go with.
GreedyRates
I will be moving to Canada in 2020. As a new immigrant, I want to open a savings account that will give high interest rates. Apart from that i would like to know which bank would be the best that have good offers for the new immigrants. I dont want to put all eggs in one basket. Hence i would like to know about other high interest savings option as well.
Hey Rin,
Thanks for coming to GreedyRates, and we look forward to your joining us in Canada! If you want to join the banking sector and start building credit quickly, then the best way to do so is by depositing money into the same ‘Big Five’ Canadian bank where you also get your credit cards and savings or investment accounts. Though you might feel like you’re putting all your eggs into one basket, your “eggs” (the types of accounts and cards you get) will be much bigger and more beneficial when the bank behind them also has a line of sight on your collateral.
In our experience, you can’t go wrong with banks like BMO, CIBC, and MBNA. They offer the largest variety of financial products including the savings and chequing accounts you need, as well as some great entry-level credit cards so you can start building credit. If you don’t plan on depositing money from your country of origin, then we’d advise starting with a secured credit card. Something like the Home Trust Secured Visa lets you get a credit limit contingent on a low security deposit. If you need any further assistance just reply or email us at [email protected]. Thanks!
GreedyRates
I sold my home, took advantage of RBC’s high interest savings account and have now parked my money in a Monthly Income Bond Fund until I decide if I want to buy another home. Motusbank and Alterna look good and even BMO. Should I switch?
Hey Rita,
Ideally you want to put your money where it’ll earn the most interest, and because you say that you’ve “parked” your money, we’re willing to bet that you save diligently and refuse to touch what you’ve saved. If we’re right on that case, then Motusbank and some of the other online banks offer tax-free savings accounts with a multitude of GIC instruments that will suit your needs. A GIC is like a bond but on a one to five-year timeline, usually, and Motus is known to have GICs that you can park in your TFSA (with tax advantage) to get well over 2.00%. Whether or not to switch accounts is always up to you, but we think it’s worth exploring the newer finance options becoming available, if only to take the temperature of the market and ensure you’re getting a good deal at your old bank.
GreedyRates
Hi! I recently just went through a separation and got bought out of our house which means I got a good amount of money.. I am looking at buying a house with a decent down payment, with the rest of the money I want 1) to invest a smaller part in a long term investment (forgot about that $) 2) secure about half in a short term account that I can access at any time without penalties 3) put the other half in a year or so account with higher interest that I won’t touch for at least a year..
Seems simpler to do this all at one bank but it is the smartest idea?? What accounts do you suggest these 3 situations?? Thanks in advance, just so many options out there and it is confusing since I am not familiar with any of this..
Hey Juls!
Great questions, and you’re right in your assumption that opening and managing all these accounts will be easiest at a single bank. In that case, we recommend you open them all at one of the “Big Five” banks, like BMO or MBNA. An RRSP will be the first order of business: to make regular contributions towards each year in pursuit of a healthy retirement. Another thing to get is a regular tax-free savings account to keep cash in in the medium-term, and then a chequing account attached to it for greater access to your money. For that medium-term savings plan we recommend that you get a GIC with your bank and put that in your tax-free savings account. A GIC is a guaranteed investment certificate which locks your money down for a certain time, with a guaranteed return in interest.
In the meantime, make sure you’re putting money in your TFSA and making annual contribution maximums to the RRSP. If you’re looking for more variety, remember that you’re allowed to allocate money within your RRSP in different ways as well. Hope that helps!
GreedyRates
I have a Tax Free Savings Account which is only about .4 % interest. I’m wondering how this could possibly have any worth over a higher interest savings account for the little tax it’s likely to save.
Hi Mary,
Thanks for coming to GreedyRates. That .4% is hard to swallow after seeing all the great options available to Canadians in the current market, isn’t it? Thankfully it’s easy to get on another Tax-Free Savings Account, as they’re offered everywhere, and all banks have an interest in signing on new members. First, explore the alternatives we list on our ‘Best of’ page, including motusbank, which has the same account but a 2.35% interest rate on savings. That’s about as much as a similar online bank will offer, like Alterna or EQ.
Second, it’s useful to know that you can save and invest using all kinds of other instruments inside a tax-free savings account itself! For example, when holding a Guaranteed Investment Certificate inside your TFSA, even the Big Five banks will offer over 2.00%, just as long as you’re willing to lock that money down in the TFSA for a few years. We’d start the process by letting your bank know that you’re leaving, and to expect a request for a TFSA funds transfer. They might do something for you right then, but you’ll need to be willing to flex your biggest muscle as a consumer: the willingness to choose another provider.
GreedyRates
Hello,
I can across your site through a google search. Very informative
I am a new immigrant to Canada, coming over with substantial savings (35K) apart from my basic upkeep money for the first few month ahead of landing a job.
I desire a financial investment with healthy returns for said money(i can afford to lock it in there for a while). What are the ideal options for a newcomer like me?
Also which of the regular big 5 banks would be ideal for my everyday banking needs? alongside building a credit score.
I hope my questions aren’t too loaded.
Thanks.
Hey Kenny,
Great questions, and welcome to Canada! If you’ve got savings that you need to transfer to a Canadian bank, any of them will gladly set you up with the accounts that are appropriate and help get you started. We can also provide some relevant advice, but the first would be to find one of the “Big Five” first. CIBC, MBNA, BMO, and RBC are excellent places to begin, and you can phone or open an account online very easily. With a large deposit we’re willing to be they’ll even start you off with an unsecured credit card, but if not, a card like the Home Trust Secured Visa is accessible with a cash deposit and plugs you into the Canadian credit system.
There are a few financial instruments you want to be aware of beside a Canadian HISA (high-interest savings account), which are offered by all of the Big Five. A GIC is essentially a bond promising a certain amount of interest for locking up your deposit, $1,000 for 5 years at 3.00%, would be a good example. GICs can be held in a HISA account but also a TFSA account, which can also hold investments. These are options to explore with your banker, or via online banks like motusbank, for when and if you’re comfortable handling your banking via screen and phone only.
GreedyRates
Just wondering why I do not see a reference to Alterna Bank’s HIeSA offer of 2.30 %, or an EQ Bank Saving Plus Account, also with an interest rate of 2.30% ?
Hey B,
We looked at Alterna and found that it will indeed be a great option for many Canadians who are comfortable with a no-frills experience that prioritizes interest rates. It’s hard to beat 2.30%, but at 2.10% we found that the motusbank Savings Account gets pretty close, and from the accolades of readers has shown itself to be great bridge between the lightweight plus low rates model, and the traditional excellent customer experience of traditional banks. In this situation you should go with whatever you feel fits best.
GreedyRates Staff
I am looking for a high interest savings account. Why are business accounts interest rate -1 or more % lower than a personal account?
Hey Kathy,
Thanks for coming to GreedyRates. Your question is valid and has a simple answer: when the bank offers a lower interest rate to one party over another, it usually means that it’s because they’re a bigger risk. For a business this notion would fit, considering that in many cases businesses have a more capital than an individual person and therefore bigger cash flows, so bank is on the hook for more when rewards dollars, cash back, or interest is paid on these larger sums. If you yourself are looking for a high interest savings account (HISA), then a business account isn’t relevant unless you’re a sole operator of a small business.
We’d readily recommend options like the Motusbank high interest savings account, which doesn’t have a minimum balance nor a monthly fee, and offer 2.25% interest on your money. That’s a great option—probably the best—if you’re comfortable with online-only banks. If you’d rather have a branch to walk into, we’d check out BMO for its flexible and incentivized savings programs. For example, the BMO Savings Builder account offers 0.2% but an extra 1.2% for each month that you save at least $200. That’s like hitting two birds with one stone. Good luck on your search!
GreedyRates
Hi,
I am new to saving. So my plan is to move $50 from my each pay to this account and dont touch this account for about 10 years or more. or even if i take it i will take the entire amount and use it for some big project (buying house or something). for my situation, which bank would be worth opening a saving account with? Thanks for your reply
Hey Karthi,
If you’re looking to save slowly and consistently, and on a 10-year plus horizon then a savings account is definitely suitable. Moreover, if you’re comfortable with an online bank then try motusbank—its high-interest savings account will get you 2.25% interest without a monthly fee or a minimum deposit. You’ll also be able to do unlimited deposits and withdrawals with the account for when you need access to the money. There are few accounts that can match motus in terms of interest rate, but if you really prefer a teller and face-to-face interactions then any savings account from the Big 5 will do. In this case we’d recommend Scotia’s Momentum Plus savings account.
Motus also offers GICs and other savings instruments if you’re looking to get a bit higher rate, and are willing to lock in your cash (once you’ve saved up enough to put away). This can be a great option along with the already generous rate you’re getting from motusbank’s HISA.
GreedyRates
I appreciate this article a lot, I found it extremely helpful to gather a bunch of major savings accounts with competitive interest rates into one place.
I’m currently using BMO’s Savings Builder Account but have been eyeing Scotiabank’s Momentum Plus Savings Account for a while now. Its interest building trick is a little hard for me to wrap my head around, but I think it’s basically a GIC-lite, with how it encourages you to keep your savings locked down to reach the maximum interest rate.
Obviously the trade-off of such a potentially high rate is that it discourages you from pulling money out when you might need it. But at a base rate of 1.05%, which already goes toe-to-toe with other savings accounts mentioned like TD and CIBC’s, I was hoping you could provide some insight as to why I might not want to make the jump to Scotia’s Momentum Plus Savings Account.
Hey Ryannito!
Great of you to stop by GreedyRates with your question. The Scotia Momentum Plus Savings account is an interesting proposition and does represent a sort of “grey area” between a normal savings account and a more permanent instrument such as a GIC. While it does represent a decent value proposition, in many cases it’s better to simply opt for a flat interest rate without any caveats or conditions. Banks like those you mentioned (motus, Alterna, EQ, and other online banks) offer great rates without any minimum balance.
The Scotiabank Momentum Plus Savings Account has some conditions that make it a circumstantial benefit for most customers. For example, if you’re willing to not touch your account for the full year (to get the 1.05% regular interest plus the maximum Premium Period interest of 0.90%), then you’ll be close to 2.00% interest. You can get the same amount of interest without all the minimum balance or holding period clauses by sticking with the BMO Savings Builder. IF you opt for a 1-year GIC via motusbank, you’ll get near 3.00% interest back on that amount, rendering the Scotia account into nothing more than a novelty. Manulife and EQ are worthwhile as well.
GreedyRates
Are online banks chartered in Canada?
Hey Rich,
Good question. It’s legitimate to wonder whether or not an online bank such as Tangerine, EQ, motusbank, or Alterna are chartered in Canada or somewhere else. Lots of online banks tend to charter overseas to take advantage of favorable financial regulatory rules, especially many that serve the US, so is this the case in Canada as well? First, banks that are “online only” but are subsidiaries of larger commercial banks like Meridian (motusbank) or Scotiabank (Tangerine) will most definitely be chartered in Canada, and the rest should be examined on a case-by-case basis.
EQ Bank is owned by Equitable Bank, an old organization certainly chartered in Canada, while Alterna is chartered as a Credit Union. The banks that we mention on GreedyRates are trusted Canadian financial institutions that you shouldn’t worry about depositing with, but we appreciate your due diligence and caution. Good on you, and let us know if you need anything else!
GreedyRates
We’re just looking for an account that will help us grow over a year to save for our seasonal campground costs and maybe a little more when you factor in insurance for our trailer! EQ Bank seems to have a good rate, but are we better off with a one year GIC or just a regular savings account with a high interest rate. I think I opened an account for a 1 year GIC at 2.65% for one year as we won’t need the money until next May of 2020. Are we doing this right?
Hi David!
Great questions, you came to the right place. If you’re looking to save money for around a year or more, than a 1-year GIC is a perfect solution! There are lots of banks, both online and brick-and-mortar which offer the ability to hold a GIC in a high-interest savings account, but the best rates you’ll find will be with online banks. EQ, motusbank, and Alterna are comparable, with motusbank for example providing a 1-year non-redeemable GIC that can be held in their RRSP or TFSA accounts, both at 2.80%. If you bump that up to 18 months, then you’ll be eligible to receive 3.10%.
Either way, this represents the upper range of what you’ll get as far as rates go, so if you already opened a 1-year GIC and managed to get 2.65%, then consider us impressed! Nice job. Now you just need to play the waiting game and enjoy the money when the GIC’s term is over. So cool that you’re saving for campground and trailer insurance costs! If you need any further financial tips for road warriors such as yourselves, you know where to find us.
GreedyRates
where is DUCA with 3%. The best deal going for cash money.
Hey Josef,
Thanks for the informative post! We’re not too aware of DUCA but can already tell you that these kinds of interest rates are attainable with many of Canada’s more agile online banks such as motusbank. Motus offers a few tax-free savings account options which can achieve above 3.00% for you with a range of GICs. If you’d rather have a different type of account, then perhaps DUCA is a better option, but it also pays to be aware that they’re a credit union and not a bank. This means that it may not be as easy to attain the 3.00% as you think but give it a shot and let us know how it goes! We’ll be here to offer other suggestions if you aren’t approved.
GreedyRates
Hi CIBC eAdvantage savings account offers interest rate of 1.05% not 0.9%
Hey Bhavesh,
Thanks for your comment and for pointing out the update to CIBC’s awesome eAdvantage savings account. You’re right that now, when accountholders have at least $5,000 in the account they’ll earn a solid 1.05% interest rate and enjoy other great perks like $0 monthly fees and free paperless statements. For those who just want a basic account that delivers on its promises of low fees and good interest, and who don’t need to do frequent transfers to and from other banks, it’s one of the best. Enjoy!
GreedyRates
Hi, there.
Thank you for your hard work folks. I like reading your articles and love your answers to all of the comments. It is very personalized.
I have a question. I opened my first ever TFSA account with CIBC a few days ago and put 6000 CAD in. Now I would like to open Tangerine TFSA. Can I put another 6000 in it if its a different bank or do they count 6000 annually on all of your TFSA accounts? Can I have more then one with different banks and put 6000 in each?
Thank you
Hi Lucie,
Thanks for the shoutout and for showing us appreciation in the comments. We’re super glad you like our site! Now onto your question about Tax-Free Savings Accounts in Canada. The TFSA is a special instrument available to all Canadians that helps them save for retirement in small amounts, and there’s a universal ceiling on yearly contributions that can be made to any TFSA account (or accounts). In 2019, that contribution ceiling is $6,000, meaning that you can only deposit up to $6,000 across all your TFSA accounts within a single year, assuming that you had no extra contribution room that rolled over from 2018.
All Canadians are limited to this $6,000 because if you could open up any number of TFSA accounts then you could technically save all of your money tax-free, right? That wouldn’t be so healthy for the country, and it would also allow those with more money to have an enormous savings advantage over less-wealthy individuals. Better to restrict everyone to the $6,000 maximum. Hope that helps!
GreedyRates Staff
Hi Lucie.
Late response so you probably already have the answer but if it’s your first TFSA your limit should be a lot more than $6000 because of previous year contribution limits that you haven’t used. Unless you’re a recent immigrant and only have just recently filed taxes or lived in Canada.
Justin.
DUCA bank has 3.0% until January 2020 and it is not listed here.
Hey Brian,
Great suggestion. We’ve also been exploring some other nice savings products from banks like Alterna and Motusbank recently, and think they are worth reviewing in your case. For example, Motusbank has a short 18-month tax-free GIC that’ll earn you 3.10%. Even if you don’t want to hold the GIC in a TFSA you can still get 3.00% with Motus and start with as little as $100 principal. This would be a great option if you aren’t planning on withdrawing your money and need it more as an emergency fund, savings instrument or retirement tool.
In general, you’ll find tons of lucrative offers from the leaner online-only banks and lenders that now populate Canada’s financial market, but we just focus on the ones where we can confirm their quality. With lower margins that come from the absence of in-person service and brick-and-mortar costs, you’ll always find higher rates with these banks but also need to consider the service gap as well. Good luck in your search!
GreedyRates
As a Tangerine customer, I no longer put $ into that savings account because I don’t think there should be such a large discrepancy between new customers (2.75%) and those of us who have been loyal customers for years(1.25%). Where is the bonus for loyalty? At 1.25% it is only a shade above banks, so EQ bank seems to eclipse the value of Tangerine. The only problem I can see with EQ is they don’t offer joint accounts which could make income splitting difficult, or so I think. So maybe the solution is $into Tangerine for six months, then move it to EQ.
Hey Mickey!
Great comment, and welcome to GreedyRates. We’re also of the opinion that Tangerine could raise their savings account interest rates a bit, because new online banks like EQ (but also Alterna, Motus and others) are turning up the heat. With rates on these online-only accounts typically above 2.30%, it casts a shadow over Tangerine and leaves people questioning why they’re customers in the first place.
One answer is that Tangerine is a better compromise between traditional brick-and-mortar banks and the online-only banks like EQ. Sure, EQ will give you a debit card and a great rate on your savings, but Tangerine allows you to link their MoneyBack credit card to a savings account and then get an extra category where you’ll earn 2.00% cash back (and then 1.25% on that!). That means those who take advantage of Tangerine’s wider and more developed variety of products can receive 2.00% in three places (like on gas, groceries, and home improvement).
Also consider that when moving your balance around, you might incur fees that cut away at your interest. Thanks again.
GreedyRates
Annual interest rates on some crypto currency masternode holders are in upwards of 25% per year banks dont stand a chance in hell. Do your home work people
Hey Dion!
Thanks for the interesting and unique comment—we’ve honestly never had someone come here and recommend this type of thing. Fortunately, our position as experts in the Canadian financial space means that we understand it and can respond, even if we don’t necessarily agree with your conclusion! Cryptocurrency and blockchain are significantly risky investments and for several reasons are very poor choices for Canadians, especially because they are not recognized as licensed, legal, or compliant with regulations in any regard. When you put your money into cryptocurrency, it can therefore disappear in any number of ways without giving you any type of recourse or protection.
If the project or token you “invest” in goes bust, is proven fraudulent, or if the value simply declines into the gutter then that’s it—game over. You don’t own equity in anything, just worthless digital signatures, effectively. While there are some interesting decentralized ideas, by nature of their infrastructure, users are entirely liable for their own success. If they make a mistake with their wallet or network node, it’s on them. In contrast, if you were to invest that money into shares of a Canadian publicly-traded company, you legally own a piece of that company. Anything that fraudulently compromises this idea is covered under Canadian regulations.
Even a competitive-interest savings account is a better long-term bet. You don’t need to worry about volatility whatsoever–and will simply collect a solid 1-2% on your money each year. It’s not as glamorous as fringe digital asset gambling, but then again, it won’t ruin you either.
GreedyRates
Hi there, I am a student with no experience in savings accounts and looking for clarification. Are the percentages listed above the annual interest rate? or monthly (I am assuming annual).
Thank you
Thank you
Hey OC,
Thanks for the comment. No question is too simple to answer, and you can always feel free to ask us anything about the cards listed here. All percentages that we list on GreedyRates are annual, not monthly (thankfully) and if you have any further inquiries about how specific things are calculated in your balance, just ask. You can also check out our own interest rate calculator. Hope to hear from you again!
GreedyRates Staff