If you don’t have a high interest savings account… why not? It’s a better version of a regular savings account (seriously).
Saving accounts are very straightforward. You typically put money that you’re saving for something in them, whether that’s long-term savings, like an emergency fund, or short-term savings, for an upcoming purchase you have planned.
The problem is that they don’t do anything for you. They literally just keep your money sitting there waiting for you – ideally, you’re not paying any fees or anything like that to use it, but you also aren’t getting anything back. The thing about money that you have just sitting there for extended periods of time is that it’s losing value. Prices are typically going up, at least a little bit, because of inflation, so money that you aren’t spending – or growing – is actually becoming less valuable.
The good news is that typically the bank that you have your savings account with will pay you back interest on the money that you keep with them, as a little ‘thank you’ for choosing them. But, regular savings account, like one that traditional banks offer, don’t pay you very much interest. Depending on what’s going on with inflation and the economy, they can literally offer rates as low as 0.01%, which, if you can’t tell, is pretty low (if you have $5,000 saved, you’d get $0.50 per year).
Luckily, there are alternatives that offer higher interest rates.
What Is A High Interest Savings Account?
They’re called high interest saving accounts, which are saving accounts that earn above average interest rates on deposits, so your bank account balance can grow faster than traditional saving accounts.
Keep in mind that interest rates are always fluctuating, however regular saving account rates are always lower than high interest saving account rates. Let’s break down the current rates of both types of accounts as of March 2024 (for reference, the current inflation rate in Canada is 2.9%).
The Traditional Banks Current Interest Rates
Traditional banks, like the big 5 banks in Canada, typically offer low interest rates because they aren’t incentivized to raise the rates. They have a large share of the market, and know that people will bank with them no matter what because they already have been for years. Here are the rates that they’re currently offering –
| Bank | Account Name | Interest Rate | Current Promo | Notes |
|---|---|---|---|---|
| TD Bank | TD ePremium Savings Account | 0.00% Goes up to 1.85% if you have $10,000+ | N/A | $0 monthly fee No minimum balance CDIC insured |
| CIBC | CIBC eAdvantage® Savings Account — High Interest Savings | 0.65% Goes up to 1.50% if you have $100k+ | 5.75% for 4 months | $0 monthly fee No minimum balance CDIC insured |
| Scotiabank | Scotiabank MomentumPLUS Savings Account | 1.30% | 3.40% Welcome Bonus Interest Rate for 3 months | $0 monthly fee No minimum balance CDIC insured |
| BMO | BMO Savings Amplifier Account | 1.90% | 5.50% (expires on May 31st, 2024) | $0 monthly fee No minimum balance CDIC insured |
| RBC | RBC High Interest eSavings | 1.70% | 5.50% for 3 months (expires on April 10th, 2024) | $0 monthly fee No minimum balance CDIC insured |
Note that all of these rates are still lower than the current 2.9% inflation rate.
The Highest Interest Rates Available Right Now
High interest saving accounts are typically offered by alternative financial institutions, like online banks. Keep in mind that the key things to look for when it comes to these accounts are the fees, minimum balance, and if it’s CDIC insured (keep in mind that provincial credit unions are insured differently).
| Bank | Account Name | Interest Rate | Current Promo | Notes |
|---|---|---|---|---|
| Neo Financial | Neo High-Interest Savings Account | 4.00% | – | $0 monthly fee No minimum balance CDIC insured (The Neo High-Interest Savings account is provided by Peoples Bank of Canada, a CDIC member institution) |
| Wealthsimple | Wealthsimple Cash | 4.00% (4.50% if you have $100,000 and/or set up direct deposits / 5.00% if you have $500,000) | – | $0 monthly fee No minimum balance CDIC insured (Money is placed among x3 CDIC insured bank accounts, giving you $300k in coverage) |
| Simplii Financial | Simplii High Interest Savings Account | 0.40% (Goes up if you have $100k+) | 6.00% for 5 months (ends on April 30th, 2024) | $0 monthly fee No minimum balance CDIC insured |
| Tangerine | Tangerine Savings Account | 0.70% | 5.75% for 5 months | $0 monthly fee No minimum balance CDIC insured |
| KOHO | KOHO High Interest Savings Account | 3.00% (Goes up to 5% for paid accounts) | – | $0 monthly fee No minimum balance CDIC insured (KOHO stores your money in Peoples Trust, a federally regulated banking institution) |
| Oaken Financial | Oaken Financial Savings Account | 3.40% | – | $0 monthly fee No minimum balance CDIC insured (Choose either Home Bank or Home Trust Company as the issuer for each account, both of which are separate members of CDIC) |
| Laurentian Bank | Laurentian Bank High Interest Savings Account | 3.00% (Goes up to 4% if you have $100,000+) | – | $0 monthly fee No minimum balance CDIC insured |
| Motive Financial | Motive Savvy Savings Account | 4.10% | – | $0 monthly fee No minimum balance CDIC insured |
| Alterna Bank (Credit Union) | High Interest eSavings | 2.25% | – | $0 monthly fee No minimum balance CDIC insured |
| Saven Financial (Credit Union) | Saven Financial High Interest Savings Account | 4.15% | – | $0 monthly fee No minimum balance Eligible deposits (not in registered accounts) with Ontario Credit Unions are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA). |
| First Ontario Credit Union | High Interest eSavings Account | 1.75% (Goes up to 1.80% if you have $100,000+) | – | $0 monthly fee No minimum balance Eligible deposits (not in registered accounts) with Ontario Credit Unions are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA). |
| Meridian Credit Union | Meridian High Interest Savings Account | 2.25% | – | $0 monthly fee No minimum balance Eligible deposits (not in registered accounts) with Ontario Credit Unions are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA). |
| Desjardins Credit Union | Desjardins Savings Account | 1.70% | – | $0 monthly fee No minimum balance Eligible deposits (not in registered accounts) with Ontario Credit Unions are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA). |
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