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Searching for the best high interest savings account in Canada? We’ve got it covered with our review of the best savings accounts and how to choose the one for you.
How would you like to make money on your money? Sounds pretty good, doesn’t it? Well, that’s essentially what happens when you open a high interest savings account in Canada. Plus, it's a good way to kick start the good habit of saving money, whether it's for retirement, a house, or for a fun trip.
But what exactly is a high interest savings account? How does it work, and more importantly, do you really need one? Read on, because we’re sharing everything you need to know about the best savings accounts in Canada.
Summary of the Best High Interest Savings Accounts in 2019
|High Interest Savings Account||Interest Rate||Fees||More Info|
|Scotiabank® MomentumPLUS Savings Account||1.05%-2.0%||$5 per transaction that is not a self-service transfer||Learn More|
|Tangerine Savings||Promo: 2.75%* |
|Wealthsimple Smart Savings||2%||$0||Learn More|
|EQ Bank Savings Plus||2.30%||$0||Learn More|
There is no shortage of options for high interest savings accounts in Canada. Here’s a breakdown of the best savings accounts in Canada.
Review of the Best High Interest Savings Accounts
Scotiabank® MomentumPLUS Savings Account
Scotiabank’s Momentum Plus Savings Account is ideal for those who have a lower balance or are happy to leave their money alone for an extended period of time. This savings account has no monthly fee, no minimum balance, and unlimited self-service transfers to other Scotiabank accounts ($5 fee does apply for external transfers). As for the interest rate: the base rate is 1.00% however, that rate will increase the longer you leave your money untouched. If you don’t disturb your balance for 365 days or more, you can make the top rate of 2.0%.
Sign up here.
For those just starting out, Tangerine offers a great savings account with competitive perks such as no fees or service charges, and no minimum balance required. Tangerine also lets clients set up an automatic savings program and doesn’t lock in the money – you are free to move it around as you please. The current interest rate with Tangerine is 1.10%, however, right now Tangerine is offering new clients 2.75% interest on their first Savings Account for 6 months, up to a maximum of $1,000,000. With no fees and 24/7 customer service, it's no wonder we selected Tangerine as the best online bank in Canada. Sign up here.
Wealthsimple Smart Savings
Wealthsimple is another great choice. The big draw here is the high interest rate which is 2% (on all deposits up to $100,000). If that rate isn’t enticing enough, WealthSimple offers a savings account with no fees or minimum/maximum balance requirement. Plus, despite the fact that it’s an online-only bank, WealthSimple deposits are protected by the Canadian Deposit Insurance Corporation (up to $1,000,000). For these reasons, it’s one of the best high-interest online savings accounts in Canada. Sign up here.
EQ Bank Savings Plus Account
When it comes to high-interest savings accounts in Canada, EQ Bank Savings Plus really is a great choice. The everyday interest rate is 2.30%*, making it one of the highest rates in Canada. Additionally, there is no minimum balance requirement (though there is a maximum balance of $200,000), and it’s a savings account with no monthly fees. EQ Bank Savings Plus offers free Interac e-Transfers®, as well as unlimited free transfers to other EQ accounts and unlimited bill payments. Sign up here.
*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.
motusbank High Interest Savings Account
Canada’s fastest growing credit union, Meridian, has just launched their new online bank, motusbank, and it's already causing a stir. They're offering some excellent products and fair rates that are highly competitive to what’s available on the market. The high interest savings account is currently paying an impressive 2.25%. Also, if you open a no-fee TFSA savings account, you’ll get a whopping 2.50% tax-free interest rate – that’s definitely something to get excited about. Another bonus: motusbank offers unlimited self-serve transactions with no monthly account fees and no minimum balance required. Sign up here.
What is a High Interest Savings Account?
The goal with a high interest savings account is to help you save money. This benefits not just you as the client, but also the bank itself. With day-to-day chequing accounts, the bank needs to be able to move the money. However, with a high interest savings account, clients are “incentivized” to leave their money alone, therefore allowing the bank to loan it out to other customers.
In order to encourage customers to do this, banks offer high interest rates on specific savings accounts – which means that you, as the client, can earn money for keeping your money in one place. There are even some savings accounts without fees! However, there are often some restrictions in place with these types of accounts regarding withdrawals, access, and minimum deposits. Despite these restraints, having money in a high interest savings benefits you in the long run.
Anyone, at any age, can benefit from opening a high interest savings account. Whether you have some extra money sitting around with no immediate plans to use it or are saving for something specific in the future like retirement, a high interest savings account is a great place to put your money. It’s an especially good option for those who aren’t comfortable with taking risks. That being said, the key to a successful high interest savings account is being able to leave it untouched, which does require some discipline.
How to Choose a Best Savings Account
There are several options when it comes to choosing a high interest savings account in Canada – so you will need to shop around and compare to find the best option for your personal needs. There are several factors to consider when choosing the best savings account in Canada including:
- Minimum/maximum balance
- Monthly fees
- Transaction fees
- Interest rates
- Access to your funds (how easy is it to move or withdraw money between accounts?)
You also need to pay attention to the fine print when it comes to the interest rate: is the rate you’re getting an introductory rate that will disappear in 3-6 months? Take the time to look into these details, as they vary from bank to bank and don’t immediately knock out the little guys – you’d be surprised at how much they have to offer.
High Interest Savings: The Bottom Line
A high interest savings account is really essential when it comes to personal finances and banking. As the above summaries indicate, you don’t necessarily need to have a ton of money to start one. Just make sure to take the time to read up on the pros and cons of each before choosing the best high interest savings account for your needs. Set up an automated savings plan, and you’ll be a savvy saver in no time!
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