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What are the Best Canadian Savings Accounts?

Written by Jessica Steer
Finding the best savings account can be difficult. When you put your money away you don't want to worry about fees, ideally you want to earn something on that money. Different financial institutions offer different types of savings accounts. Which one that works best for you will depend on how much you are looking to save, what you are saving for, and what you are looking to earn on that savings.
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    Whether you go with a large financial institution, like one of the top 5 banks, or a smaller institution or credit unions, there are plenty of different savings accounts out there to fit your needs.

    Different Types of Savings Accounts in Canada

    In Canada, there are 7 different types of savings accounts. Each one serves a different purpose. Some are set up specifically for long term savings, while others are more short term savings accounts.

    Basic Savings Account

    A basic savings account is a standard entry level account. These are where you can save your money for future use. With these types of accounts though, the interest is usually limited sitting somewhere around 0.30%. Some basic savings accounts also charge a minimum fee if you don't meet the minimum balance requirement. Because the interest is limited on this type of account it's usually recommended for more short term savings.

    Youth Savings Account

    Youth savings accounts are bank accounts for Canadian residents that are 18 years of age or younger. These accounts normally have no fees or if they do, they are very minimal. Unlike basic savings accounts, youth savings accounts often allow high amounts of transactions. This is because they are meant to be a starter account for youth to learn to spend and manage their money appropriately. After the age of 18, chequing accounts are recommended for high volume transaction accounts.

    High Interest Savings Account

    High interest savings accounts are similar to basic savings accounts in the sense that there are no minimum deposit requirements. The difference, though, is that there are maximum balance and withdrawal limits on high interest accounts. The interest rate is also higher. It normally ranges between 1.5% and 2.00% depending on what your financial institution offers. There are also US Dollar regular savings accounts and high interest savings accounts available.

    Registered Savings Account

    There are a few different types of registered savings accounts. These accounts are registered with the CRA (Canada Revenue Agency) and allow you to qualify for tax benefits. Most savings accounts have lifetime contribution limits as well as yearly contribution limits. These can be found on your Notice of Assessment you receive after you file your tax return.

    Certain types of investments like mutual funds and GICS can be held in registered accounts. There are different types of registered accounts depending on your reasoning and qualifications.

    Registered Retirement Savings Plans (RRSP)

    RRSPs are there to save money for when you retire. The reason people save with RRSPs is because the money put into the account is non-taxable. You receive any tax you paid on money you put into RRSPs back when you file your tax return. You then pay income tax on this money when you retire and it's then considered to be income.

    WIth an RRSP, you don't just have to save for retirement though. The funds in this account can be withdrawn without penalty under the Home Buyers Plan and/or the Lifelong Learning Plan. There is a limit to how much you can withdraw with each plan, as well as requirements on how long you have to return the funds and avoid paying any penalties.

    Registered Education Savings Account (RESP)

    RESPs are used to save money for your child or grandchild's post secondary education. WIth these accounts, the government of Canada also offers the Canada Education Savings Grant which will match 20% of RESP contributions up to $500 per year per child. RESPs don't provide you with a tax break right away.

    The money in RESPs are eventually taxed though. Once they are withdrawn for education expenses, they are taxed upon withdrawal. They can be used for:

    • Tuition
    • Housing
    • Books
    • Living expenses

    They can be used for any expense really that is related to education expenses.

    Registered Disability Savings Plan (RDSP)

    This account allows you to put money into an account for someone with disabilities. They can be withdrawn by the beneficiary whenever they want to, plus these accounts are eligible for certain grants from the government of Canada as well. All RDSP withdrawals are tax free, but you do need to pay taxes on anything earned in the account. All government grants must be returned as well.

    Tax Free Savings Account

    One of the most common registered accounts are tax free savings accounts. These accounts allow for earnings that are tax free, and there are no restrictions on what the account can be used for. Anything earned and put into the account is tax free, even after it's withdrawn.

    All financial institutions offer TFSAs. The main reason people tend to use these instead of RRSPs is because funds can be withdrawn at anytime with no penalty.

    Best High Interest Savings Accounts

    Choosing a high interest savings account can be difficult. There are different percentages offered at different financial institutions. Sometimes the same bank you do all of your everyday banking with doesn't always have a higher interest rate.

    Simplii HISA

    One bank that offers a high interest savings account with a high interest rate is Simplii Financial. They are currently offering an interest rate of 5.25% until July 31, 2023. Once you have opened the account, the premium period interest rate is available for 5 months. On top of that, there are no fees with Simplii Financial accounts, savings or chequing.

    With a Simplii HISA, there is no minimum balance required, there are no transaction fees and you can access your savings if you need them. A Simplii chequing account allows for unlimited transactions, has no monthly fees and overdraft protection if needed. Also, eligible funds of up to $100,000 are covered by the CDIC.

    Once the promotional interest rate is over, the interest rate on your high interest account will depend on your account balance.

    • $0 - $50,000 - 0.40%
    • $50,000 - $100,000 - 0.40%
    • $100,000 - $500,000 - 0.40%
    • $500,000 - $1,000,000 - 1.00%
    • $1,000,000 and up - 4.10%

    EQ Bank Savings Plus

    EQ Bank Savings Plus isn't a traditional high interest savings account. It's a combination between a chequing account and a savings account. It offers unlimited transactions, no monthly fees and you can earn 2.50% on every dollar in your account. You continue earning interest on anything in your account until you spend it.

    While traditional savings and chequing accounts are separate, EQ is one of the only financial institutions offering this joint account approach. It allows you to do all of your banking from one account and avoid having to make a bunch of transfers. You can even set up automatic payments from this account. Also, eligible funds of up to $100,000 are covered by the CDIC.

    KOHO Earn Interest

    KOHO is another account that offers a different approach to banking. The free KOHO account allows you not only to earn interest on your savings but on the money that you spend as well. You can also get 1% cash back on grocery and transportation purchases.

    KOHO has different plans available and the interest that you earn will depend on which plan that you choose. There are no minimum balances required and they don't offer promotional rates. The rate you get stays. Just like the other financial institutions in Canada, up to $100 thousand is insured by the CDIC (Canada Deposit Insurance Corporation).

    Plan Interest Rate Monthly Cost Included
    Easy 0.5% $0 1% cash back on 2 categories
    Essential 1.5% $4 1% cash back on 3 categories and 0.25% on the rest
    Extra 2% $9 2% cash back on 3 categories and 0.5% on the rest; $7 credit building
    Everything 4% $19 2% cash back on 3 categories and 0.5% on the rest; $5 credit building

    Neo Financial

    Neo Financial is an online bank. Everything they offer is accessed remotely and they can be contacted online and over the phone. While Neo doesn't offer a wide range of financial products, they do offer RRSPs, TFSAs and Personal Accounts. Unlike traditional banks, their personal account has a higher interest rate than some high interest savings accounts.

    The Neo money account offers:

    • An access card
    • 2.25% interest
    • Free e-transfers
    • Unlimited free transactions
    • Unlimited bill payments
    • Bank to bank transfers for free
    • Autsave
    • Direct deposit
    • No monthly fees

    With the Neo money account, you can also link your Neo personal investment account. Also, eligible funds of up to $100,000 are covered by the CDIC.

    Motive Financial

    Another popular alternative bank that offers a high interest rate on savings is Motive Financial. Their Motive Savvy Savings Account has:

    • No monthly fee
    • Unlimited transfers between accounts
    • Free deposits
    • 2 free transactions per month

    The amount of interest that you earn depends on your account balance. Balances between $0 and $5,000,000 earn 4.01% interest. Balances above that earn 0.50% interest. Interac e-transfers aren't free with this account though. They cost $1.00 each. ATM withdrawals are free as long as they are part of the EXCHANGE network. If they aren't then the cost is $1.50 per transaction. Also, eligible funds of up to $100,000 are covered by the CDIC.

    Motusbank

    Motusbank offers a few different ways to save. They have TFSAs, RRSPs and their high interest savings account. This account includes:

    • 2.50% interest
    • No account fees
    • No minimum balance requirement
    • Unlimited purchases
    • Unlimited withdrawals
    • No ATM fees with the EXCHANGE network

    With Motusbank eligible deposits are insured for up to $100,000 with the CDIC, just like the other banks listed above.

    HSBC High Rate Savings Account

    HSBC is a larger bank in Canada that offers a variety of accounts and banking services. Included in these banking options is a high rate savings account. Unlike other banks though, their high interest account is recommended for those who don't wish to use the account to make purchases.

    Even though it's not recommended to access your savings often, there are plenty of ways you have access to your funds including free withdrawals through the EXCHANGE network ATMs. They also don't charge any monthly or administrative fees. There are no minimum balance requirements and you get free fund transfers from your other HSBC accounts. Also, eligible funds of up to $100,000 are covered by the CDIC.

    The interest rates available for this account are always competitive. Here are the current rates.

    • Amounts up to $24.999.99 - 1.15%
    • $25,000 to $49,999.99 - 1.65%
    • $50,000 - $99,999.99 - 1.65%
    • $100,000 - 1.65%

    Wealthsimple Save

    Wealthsimple is another company that has decided to create a savings account that you can save and spend from. Their current interest rate is 1.5%. Like other alternative banks, they don't believe in promotional rates and offer you the best rate that they can at all times.

    With this account, there are no monthly fees and no minimum deposit amounts. You can set up automatic transfers to this account as well of any amount that you would like. You can open the account right on their website. Eligible funds of up to $100,000 are covered by the CDIC.

    Tangerine High Interest Savings Account

    Tangerine savings account is another option for a HISA. The regular interest rate that they offer is 1.00% but they are currently offering a promotional rate of 5.25% and you could also earn up to $400 cash back. Eligible funds of up to $100,000 are covered by the CDIC.

    There are no monthly fees or no minimum deposit amounts with this account. They also have a savings calculator on their website that shows you what you need to save in order to reach your goals. They also offer TFSAs, RRSPs and RIFs.

    Alterna Bank HISA

    Alterna bank offers a high interest savings account that has very competitive interest rates. They also offer:

    • Free e-transfers
    • Free unlimited transactions
    • High interest rates on every dollar
    • No minimum balance requirement

    This account has an interest rate of 2.25% but it's also not the only account that Alterna Bank offers. They have all sorts of financial products including:

    • No fee e-chequing accounts
    • No fee e-TFSA accounts
    • No fee e-RRSP accounts

    Since this bank is run completely online, they have the online banking and mobile app available 24/7 so you can complete your banking needs. They even offer mobile cheque deposits. Overdrafts are available for the cost of $2.50 per month and at an annual percentage rate of 19.99%. Also, eligible funds of up to $100,000 are covered by the CDIC.

    Oaken Financial Savings Account

    Oaken Financial offers a savings account with one of the highest non promotional interest rates. They are currently offering 3.40%. This also comes with no fees and no minimum balance requirements. There are no transaction fees and you can make as many as you want. The funds are easily transferable and they can be accessed at any time.

    The Oaken savings account isn' the only financial product that they offer either. They also offer registered and non-registered GICs (Guaranteed Investment Certificates). Eligible deposits with Oaken are also covered up to $100,000 with the CDIC.

    Home Trust High Interest Savings Account

    Home Trust offers a high interest account that is also considered to have one of the highest non promotional rates in Canada. Their current rate sits at 4.20%. You have access to your funds and there are no lock-in periods, the interest is calculated daily and paid monthly, and you can access your deposit through Home Trust or Home Bank. Eligible deposits are also insured for up to $100,000 with the CDIC.

    High Interest Savings Accounts at the Big 5 Banks

    The smaller banks aren't the only ones that offer high interest savings accounts. The top 5 banks also have some great high interest accounts to offer.

    RBC

    RBC, also known as the Royal Bank of Canada, offers a high interest e-savings account. Until July 31, 2023, you can get the promotional interest rate of 5.00% for your first 3 months. There is no minimum balance requirement, free 24/7 account transfers, interest earned on every dollar and access to MyAdvisor where you can see all of your accounts and investments in one place.

    While there are no monthly fees, Interac e-transfers do cost $1 each, and any debits that exceed your monthly limit are $5. Each cross border debit costs $1. Once the promotionals period of the 5.00% interest rate ends, the rate will be 1.6%.

    TD

    TD has a high interest savings account as well. That said, their rates and restrictions are a bit different than some of the other high interest accounts that we have discussed already. There is no monthly fee but there are transaction fees which are $5. There are also non-TD ATM withdrawal fees of $2.

    With a TD high interest account, you actually don't earn any interest until your account balance reaches $5,000. From $5,000 your rate is 0.05%. They however do also offer the TD Everyday Savings Account which also has no monthly fee and earns you interest on your balance.

    Scotiabank

    With Scotiabank the Momentum plus account has everything you need. There are no monthly account fees and the longer you save, the higher your interest rate goes. If you sign up now, you can get up to 5.00% interest for your first 5 months.

    This account is best suited to someone who doesn't want to make debit transactions directly out of the account. That said, you can transfer to any of your other scotiabank accounts at any time with no fee. There are different promotional period interest rates on this account and it does get boosted over time, but the regularly offered interest rate is 1.6%.

    CIBC

    CIBCs High Interest Savings account is called the CIBC eAdvantage Savings Account. Right now, you can get a special offer of up to 5.00% when you first open your account. This rate will stay in effect for 4 months. With this account you can also:

    • Earn interest on every dollar
    • Get a smart interest bonus interest rate on top of your regular interest rate. This happens when you save $200 or more in one month.
    • Set up autosave
    • Earn regular interest from 0.40% to 1.60%.
    • Smart interest of 0.50%
    • No monthly fees
    • $5 transaction fees

    The CIBC website also has a savings calculator in order to help you figure out how much you need to put away per month to reach your goals.

    BMO

    BMO offers a few different high interest accounts but the one with the most benefits is the Savings Amplifier Account: It includes:

    • Unlimited self-serve transfers to your other accounts
    • No monthly fees
    • No minimum balance requirements
    • 1.80% interest

    They also have an account called the BMO Savings Builder Account. This one includes:

    • No monthly fees
    • A base rate of 0.50%
    • 2.00% interest when you save at least $200 per month
    • 1 free monthly transfer to another BMO account

    Best No Fee Bank Accounts

    Now that we have looked at some of the best savings accounts in Canada, what about everyday banking? There are quite a few different no fee bank accounts in Canada, but which ones are really the best? Let's take a look at some of the ones with the best ratings. It probably won't surprise you to find out that many of them are the same.

    Simplii Financial

    Along with their high interest savings accounts and other financial services, Simplii Financial also offers a no fee chequing account. Included with this account there is:

    • No minimum balance requirement
    • Free daily banking
    • Free Interac e-transfers
    • Free access to CIBC ATMs

    Also, until June 30,2023, if you register for a no fee chequing account you could receive up to $400. If you are a student and the chequing account isn't ideal for you, they also offer a no fee student banking account.

    Alterna Bank

    Alterna Bank is another one that offers a no fee chequing account along with their high interest savings account. This account includes:

    • No minimum balance requirement
    • Free transactions
    • Free Interac e-transfers
    • Access to The EXCHANGE network ATMs for free

    Along with these perls, Alterna Bank offers external account transfers. This means that you can transfer to and from any of your other financial institutions as long as that institution supports it.

    Tangerine

    Tangerine is another bank that offers a no fee chequing account with some great perks. Plus, if you sign up right now with a chequing and savings account you could earn up to $400 cash back.

    The features included in this no fee chequing account are:

    • Make online and in app purchases with visa debit
    • No fee daily transactions and debit purchases
    • Free access to scotiabank ABMs
    • Overdraft protection
    • The ability to track and categorize your spending
    • Earn interest on every dollar in your account
    • Mobile cheque deposit
    • Bank drafts
    • Orange alerts
    • Borderless visa debit

    As you can see there are so many perks that Tangerine offers.

    PC Money

    Along with the PC Financial Mastercard, President's Choice also offers the PC Money account. Just like the credit card, you can earn PC points every time you use your PC Money card. Also included is:

    • No monthly fees
    • No minimum balance requirements
    • Free Interac e-transfers
    • Free transactions
    • 150,000 points when you sign up (for a limited time)

    Coast Capital

    Coast Capital Savings is a credit union that is headquartered in Surrey, British Columbia. It's actually one of the largest credit unions in Canada. They offer many different financial services but their most popular is their chequing account. It includes:

    • No to low monthly fees
    • Mobile deposits
    • Mobile banking
    • Free access to The EXCHANGE network ATMs
    • Free monthly e-statements
    • Overdraft Protection
    • $1.50 to send e-transfers, free to receive

    Until June 30, 2023, you can get up to $400 when you become a member and get a no fee chequing account.

    Motive Financial

    If you're in the market for a no fee chequing account, another great choice is the Motive Financial Motive Cha Ching Account. It includes:

    • Free Interac e-transfers
    • Unlimited transactions
    • 50 personalized cheques
    • The second largest ATM network in Canada
    • Rate of 0.25% interest earned on funds
    • 2 free non-EXCHANGE network ATM withdrawals (the rest $1.50 each)

    Best Interest Rates in Canada

    When it comes to interest rates on savings accounts, the highest interest savings account rate (promotional rate or not) is around 5.25%. While many people still look for accounts that are 7%, or 6%, there are no offers like that around right now.

    Keep in mind when you are choosing a high interest savings account, that some rates are promotional and some aren't. If you do decide to go with an account that is offering a promotional interest rate, make sure you look at what the rate will be once the promotion ends. You want to be sure that you are still getting a good rate.

    Reasons To Open A High Interest Savings Account

    When you are considering opening a new savings account, you have quite a few different options. It's important to keep in mind that you don't have to choose just one. Each type of savings account is useful for different reasons. High interest savings accounts are best used for short term savings while earning as much as you can. These are often referred to as high yield savings accounts. With most of these the interest earnings are deposited in your account every month adding your interest income to your total amount.

    The reason they are best used short term is because they help you save for your goals while giving you access to the money at any time. This means you can transfer money in or withdraw whenever you want to.

    Once the money is in your account you begin to earn interest. Unlike other types of savings accounts, there are no maximum yearly amounts. You can add as much in as you like. There are no withdrawal penalties and you don't need permission to access your money.

    High interest savings accounts are an ideal choice for emergency fund accounts. The money stays in the account until you need it. If your car breaks down, your home needs repairs or you just need some extra money for expenses, it's there when you need it. It also avoids you having to pay interest on emergency loans.

    Choosing the Right High Interest Account for You

    We have given you plenty of options when it comes to choosing an account. That said, you should still make sure the account fits your needs before you sign up. The things you should pay attention to are:

    • Minimum deposit requirements
    • Reputation
    • Security
    • Interest rates
    • Services fees

    While a lot of savings accounts don't have minimum deposit requirements, others do. You should look into this before you make your decision, especially if you are just starting a savings account for the first time. Not everyone has large savings account deposits to start with when they first decide to save. If you are just starting out on your savings journey, you should also look into service fees. While more accounts don't charge monthly fees for HISAs, there is likely only a limited number of withdrawals before you start getting charged.

    Looking to see if the bank you are choosing has a good reputation is also key. If its current customers are happy then you likely will be too. This ties right in with security as well. You can't make sure that your funds are secure. Check and see what they have in place in order to protect your funds.

    Lastly, it's important to look at the interest rates. Some banks offer higher interest rates than others. When looking though, don't just look at the introductory interest rates (promotional rates), look at overall long term interest rates. This is especially important if you are looking to invest your money for a longer period of time, rather than use it for a specific goal in just a few months.

    Final Thoughts

    Ultimately, this may seem like an overwhelming decision but no matter what you do you can't really go wrong. Saving your money in any way that you can, including with a standard savings account, is a great financial decision so it's best to do it in any way that you can. That said, do your research before you open your account and be informed when you start putting your money away. From there, no matter which bank or financial institution you choose, you can start saving to reach your ultimate financial goals.

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