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.
- 1 Comparison of The Best High-Interest Savings Accounts in Canada
- 2 What is a High Interest Savings Account?
- 3 How to Choose a Best Savings Account
- 4 Review of the Best High Interest Savings Accounts in Canada 2018
- 5 High Interest Savings Account: The Bottom Line
Comparison of The Best High-Interest Savings Accounts in Canada
|High Interest Savings Account||Interest Rate||Minimum Balance||Fees||Apply|
|Tangerine Savings||Promo: 3% (for first six months)|
|$0||$0||Sign up here|
|Wealthsimple Smart Savings||2%||$0||$0||Sign up here|
|Simplii Financial High Interest Savings||Promo: 3.15% (until February 28, 2019)|
|$0||$0||Sign up here|
|EQ Bank Savings Plus||2.30%||$0||$1.50 per transfer after 5 transfers||Sign up here|
|Scotiabank Momentum Plus||Promo: Earn an extra 1.25% on new deposits (until March 10, 2019)|
|$0||$5 per transaction that is not a self-service transfer||Sign up here|
|RBC High Interest eSavings||1.20%||$0||$1-$5 fee on other transactions||Sign up here|
|BMO Savings Account Builder||0.2%-1.4%||$0||$5 per additional transaction||Sign up here|
|CIBC eAdvantage||Promo: 3% (until March 31, 2019); Regular: 1.2%||$5,000||$1.5-$5||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 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.
Review of the Best High Interest Savings Accounts in Canada 2018
There is no shortage of options for high interest savings accounts in Canada. Here’s a breakdown of the best savings accounts in Canada.
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 1.25%, however, right now Tangerine is offering new clients 3% interest on their first Tangerine Savings Account, Tax-Free Savings Account or RRSP Savings Account for 6 months up to a maximum of $1,000,000 (this offer is valid until April 30, 2019). 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.
Simplii Financial High Interest Savings Account
Simplii Financial may be a lesser known name when it comes to banking in Canada, but it offers one of the best savings accounts in Canada. No minimum balance, no transaction fees, and no monthly fees are definite perks. The regular interest rate is 1.25%, however until February 28th, 2019, new deposits can earn 3.15%. Sign up here.
EQ Bank Savings Plus
When it comes to high interest savings accounts in Canada, EQ Bank Savings Plus really is a great choice. The standard interest rate is 2.3%, making it one of the highest-earning savings accounts 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 five free interact transfers each month ($1.50 for any additional transfers), unlimited free transfers to other EQ accounts and unlimited bill payments. Sign up here.
Scotiabank Momentum Plus
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 fees, 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 1.05% 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 1.95%.
Right now, Scotia Bank has an extra interest promotion available to account holders who make a deposit until March 10, 2019. Deposits made before this date can earn an extra 1.25%. Sign up here.
RBC High Interest eSavings
RBC offers a basic high interest savings account with no monthly fees, withdrawal period, or minimum balances. The interest rate is one of the lower ones on this list, 1.2%, but the account also includes free and unlimited transfers to any other RBC account and one free ATM withdrawal per month making it ideal for low balances. Additional transactions range from $1-$5. Sign up here.
BMO Savings Builder Account
When it comes to the best savings account in Canada, BMO’s Savings Builder Account takes a unique approach to its interest rate. The base rate is incredibly low for a high interest savings account, only 0.2%, however, for every month that you manage to save $200 minimum, you will get a bonus of 1.2% interest, which bumps the total interest to 1.4%. There is no minimum balance so this is an ideal account for those just starting out and focusing on saving. The BMO Savings Builder Account only offers one free transfer per month ($1-$5 fee for other transactions) and has a maximum balance of $250,000. Sign up here.
The best choice for a CIBC high interest savings account is the CIBC eAdvantage. For a limited time CIBC is offering a 3% interest rate on new deposits (until March 31st, 2019, after this the normal rate is 1.2%). The account balance does need to be over $5000 for this — which is lower than the requirement for TD but not ideal for low balances or those just starting out. However, clients do get free transfers through other CIBC accounts through other CIBC accounts (non CIBC accounts will incur a $5 transfer charge) and there are no monthly fees. Sign up here.
High Interest Savings Account: 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!
Latest posts by Hannah Logan (see all)
- All You Need to Know About Getting a Home Equity Loan - February 6, 2019
- What is the Best Retirement Plan in Canada? - January 2, 2019
- The Best High Interest Savings Account in Canada - December 15, 2018