The best savings accounts in Canada offer high-interest rates and a no-fee account that comes with free withdrawals and deposit privileges.
Savings accounts are safe places to keep funds you don’t need right away. While the money is banked, you earn a little interest and extra cash from the bank since they put it to work when they give out loans.
When you choose an online high-interest savings account, your interest rate may even beat inflation and increase your spending power in real terms over time.
In Canada, most savings accounts are protected federally via the Canada Deposit Insurance Corporation (CDIC) by up to $100,000 per account type.
Savings accounts at provincial credit unions are protected by the province’s deposit insurer.
Compare the Best Savings Account Rates in Canada
Here are some of the best savings account interest rates you will find in Canada.
Note that these rates are subject to change and you can confirm the most updated rates by visiting the financial institutions using the links below.
|EQ Bank Savings Plus Account||1.50% – 2.30%||Learn more|
Best Online Banks Savings Accounts
Online banks in Canada are able to offer some of the highest interest rates savings accounts because they spend little to no money on maintaining physical branches (aka overhead costs).
Also, these virtual banks generally have no minimum balance and come with unlimited free transactions including Interac e-Transfers.
For details on the pros and cons of online banks, read my detailed breakdown here. Note that the current rates are depressed than usual due to the ongoing economic downturn.
EQ Bank Savings Plus Account
EQ Bank’s high-interest savings account is called EQ Bank Savings Plus.
With a regular 1.50% everyday interest rate on balances up to $200,000, this account is one of the best in Canada.
You enjoy unlimited Interac e-Transfers, bill payments, electronic fund transfers, and no minimum balance.
The EQ Bank Savings Plus account has no monthly fees and it comes with a well-rated mobile app.
- Regular interest rate: 1.50%
- Monthly fee: None
This hybrid account also offers free mobile cheque deposits and it’s insured by CDIC. You can get more details from my EQ Bank review.
Motive Financial Savvy Savings
This high-interest savings account offers a 1.25% interest rate, has no monthly account fee, and comes with two free withdrawals per month.
Additional withdrawals e.g. bill payments and other electronic debits cost $5.00 each. Interac e-Transfers cost $1.00 each.
Motive Financial is a division of the Canadian Western Bank and deposits are eligible for CDIC protection. You can learn more about Motive Financial in this review.
Wealthsimple Cash Account
Wealthsimple is one of the best robo-advisors in Canada offering investment accounts, personal and business savings, and a free online stock trading account.
Wealthsimple Cash is a peer-to-peer money transfer platform and a savings account. It has no monthly account fees, no minimum balance, and a 0.75% interest rate.
Your account is protected by the Canada Deposit Insurance Corporation (CDIC) and Wealthsimple plans to add-on the following features in the near future:
- No-FX transaction fees
- Free ATM withdrawals, e-Transfers and bill payments
- A premium tungsten metal card
Read this Wealthsimple Cash review.
Simplii Financial High-Interest Savings Account
This savings account from Simplii offers a 0.10% regular interest rate, no monthly account fees, and no minimum balance.
A Simplii high-interest savings account also comes with free unlimited transactions and Interac e-Transfers.
- Regular interest rate: 0.10%
- Monthly fee: None
Tangerine Savings Account
Tangerine is the direct banking arm of Scotiabank.
Its high-interest eSavings Account offers a 0.10% interest rate on up to a $1,000,000 balance.
A Tangerine Savings Account has no monthly fee or minimum balance. You get unlimited free deposits, Interac e-Transfers, and withdrawals at thousands of Tangerine or Scotiabank ATMs across Canada.
- Regular interest rate: 0.10%
- Monthly fee: None
You can open a Tangerine RRSP, TFSA, RRIF or US$ Savings Account. Take a look at this Tangerine review for more details.
Oaken Financial Savings Account
Oaken Financial is a subsidiary of Home Trust. Its high-interest savings account is eligible for CDIC coverage and offers a 1.25% interest rate.
The account comes with unlimited free transactions and no monthly fees.
At the time of opening your account, you can choose either Home Bank or Home Trust as the issuer for your savings account.
Learn more about Oaken Financial.
Manulife Advantage Savings Account
Manulife is a subsidiary of The Manufacturers Life Insurance Company.
Its high-interest savings account is known as the Manulife Advantage Account and offers a 0.15% interest rate.
You get easy access to 3,500 ATMs and when you keep a minimum $1,000 balance, you get free unlimited transactions, including direct deposits and withdrawals.
Interac e-Transfers, debit card purchases, and bill payments cost $1.00 each when you do not meet the minimum account balance requirement.
LBC Digital High-Interest Savings Account
LBC Digital’s high-interest savings account offers a tiered interest rate of up to 1.20%.
This Laurentian Bank of Canada online savings account comes with no minimum balance requirement or monthly account fee.
Account balances up to $500,000 earn a 1.20% rate and any amount exceeding this earns a 0.30% interest rate.
Laurentian Bank is based in Quebec. Learn more about the bank here.
Best Big Bank Savings Accounts
Big banks such as TD, RBC, Scotiabank, or CIBC rarely offer the highest interest rates in the country. However, you may find them offering ‘acceptable’ promotional rates every now and then.
Read the small print to see if there are transaction limits and the associated fees. Also, there may be a minimum balance required to earn interest.
Scotiabank Momentum PLUS Savings Account
Scotiabank’s Momentum PLUS Savings Account is one of the best savings accounts for a traditional bank in Canada. There is no monthly account fee or minimum balance and you can deposit cheques using your smartphone.
The Momentum PLUS Savings Account offers a regular rate of 0.05% plus a premium rate between 0.15% and 0.45%.
The premium rate is calculated daily and paid at the end of each premium period if no debit transaction has occurred within the premium period.
For example, the 180-day premium period is 0.25%. If you qualify for this 180-day premium rate, you earn a total annual interest rate of 0.30% (i.e. 0.05% + 0.25%).
TD High-Interest Savings Account
TD Bank’s high-interest savings account comes with a tiered interest rate of up to 0.05% when your account balance is $5,000 or more.
While there is no monthly account fee, transaction fees apply unless you have a minimum monthly balance of $25,000. For accounts under $25,000, expect to pay up to $5.00 for each transaction e.g. bill payments and cheques.
TD also has the TD ePremium Savings Account which pays a 0.10% interest.
BMO Savings Builder Account
The Savings Builder Account is BMO’s high-interest savings account.
It has a 0.05% base interest rate and an additional bonus interest rate of up to 0.30% when you increase your monthly balance by at least $200 each month.
This account comes with one free withdrawal and additional withdrawals or transfers cost $5 each.
RBC High-Interest eSavings Account
This high-interest savings account from The Royal Bank of Canada offers 0.05%. There is no monthly account fee and 1 free RBC ATM cash withdrawal is included per month.
Additional transactions cost $5 each and Interac e-Transfers are $1.00 each. Regular fees apply to ATM withdrawals.
Learn more about RBC High Interest Savings Accounts.
CIBC e-Advantage Savings Account
This is CIBC’s high-interest savings account and it offers a 0.05% interest rate.
While there is no monthly account fee, you will pay $5 for each transaction including debit purchases, cheques, pre-authorized payments, Interac e-Transfers, bill payments, CIBC withdrawals, and branch transfers.
New customers may benefit from a bonus interest rate for the first 120 days.
Best Credit Union Savings Accounts
A good number of credit unions and their online subsidiaries can be “credited” with some of the best high-interest savings rates in Canada.
Below, I have listed some online banks owned by credit unions.
Provincial credit unions offer deposit insurance via a provincial credit union deposit guarantee corporation.
Maxa Financial High-Interest Savings Account
Maxa Financial is a division of Westoba Credit Union and its deposits are 100% guaranteed by the Deposit Guarantee Corporation of Manitoba (DGCM).
Their high-interest savings account offers a 1.10% rate and there are no monthly fees.
Achieva Financial is a subsidiary of Cambrian Credit Union. Their high-interest savings account offers a 1.20% rate, free deposits and one free cheque, direct transfer or preauthorized payment every month.
Additional transactions cost $1.00 each. Savings at Achieva are protected by DGCM.
Get more details in this Achieva Financial review.
Implicitly Financial is a division of Entegra Credit Union.
Their high-interest savings account offers 1.10%, has chequing privileges, and a debit card for ATM and POS access.
Your savings are protected by DGCM.
Ideal Savings is a division of Carpathia Credit Union Ltd.
Their high-interest savings account offers a 1.01% interest rate and three free electronic fund transfers per month. Your deposit is guaranteed by DGCM.
Check out this Ideal Savings review for more information.
What is a Savings Account?
A savings account is a bank account where you keep money while earning interest. Unlike a chequing account, most savings accounts do not require a monthly fee, however, transaction fees may be applicable when you withdraw or transfer funds.
The interest rate paid on your savings is either flat, tiered, or promotional.
A flat regular rate is paid regardless of your balance (unless a minimum balance is specified); a tiered rate may apply when your savings is over a certain amount, and promotional rates are good for a specified length of time.
Savings accounts are relatively safe, although, they rarely pay you a lot of interest.
Some reasons why you may want to keep money in a savings account include:
- Build an emergency fund
- Save for a short term goal e.g. vacation, home down payment, or car
- Diversify your investments
- Keep your money in a safe place while getting something in return i.e. interest
Types of Savings Accounts
There are different types of savings accounts available in Canada, including:
Regular Savings Accounts: This account doesn’t pay much in interest. Usually, this account is opened at the same time you open your chequing account.
High-Interest Savings Accounts: Offers a higher interest rate compared to a traditional savings account. There may be a limit to the number of withdrawals you can make since these accounts are designed to ‘save’ money.
Tax-Free Savings Accounts: Canadians who are 18 years or older can save and invest using a tax-free savings account (TFSA). You can find out what the annual TFSA contribution limit is. Here are some of the best TFSA savings rates in Canada.
RRSP Savings Accounts: In addition to investing your registered retirement savings plan in ETFs and mutual funds, you can also use a savings account.
US Dollar Savings Accounts: You can use this account to keep your USD currency and earn interest. Here are some of the best USD Account options for Canadians.
Children’s or Youth Savings Accounts: These accounts are for children and can be opened by an adult on their behalf. They usually offer free transactions and a better than average rate compared to a basic savings account. Here are the best children’s savings accounts.
What To Look For in a Savings Account
If you are shopping around for a new savings account, here are some of the factors to consider:
1. Interest rates: Many banks offer rates that are essentially nothing…think 0.05% or some other ridiculously low rate. While the interest rates being offered are currently low across the board, online banks like EQ Bank generally offer fairly reasonable rates that may even exceed inflation.
Ensure you understand how the bank calculates interest rates. In some cases, you may need to opt for a high promotional rate and simply move your account when it expires.
It may also be worthwhile to move your account if there’s a significant sign-up bonus. However, look out for the popular bait-and-switch tactics. What does the bank’s track record look like?
2. No monthly fee: While this should go without saying, you want to ensure that the account has no monthly fee.
3. Transaction fees: Does the account offer free and unlimited transactions? See if withdrawals, eTransfers, bill payments, etc. are free and that they offer access to a good number of free ATMs.
4. Minimum deposit requirement: Some savings accounts require a minimum deposit e.g. $5,000 before your money starts to generate interest.
5. Convenience: Many online banks are only accessible through the internet and telephone. Check whether you can live with the level of support provided. Is the mobile app user friendly? What are the hours for customer support? Access to mobile cheque deposits? Automatic savings plans?
Overall, read the fine print to understand the terms and conditions relevant to your account.
6. Deposit insurance: Savings accounts in Canada are generally protected by CDIC or a provincial insurer. Confirm whether or not the account enjoys the coverage and for how much.
Benefits of a High-Interest Savings Account
The best high-interest savings accounts are offered by virtual banks and provide the following benefits:
- You earn a higher interest rate compared to a regular savings account or a chequing account which often pays nothing
- Your savings grow risk-free
- Easy access to your money when you need it compared to a Guaranteed Investment Certificate (GIC)
- No monthly account fees and many also offer unlimited free transactions
- It is easy to open an account online without leaving your home
- You can set up an automatic savings plan
Disadvantages of a High-Interest Savings Account
- GICs may offer better rates, however, you will have to live with the lock-in period for a non-redeemable GIC
- A savings account offers a lower return expectation compared to investment assets such as ETFs, mutual funds, and stocks
- There may be transaction or withdrawal limits. Additional transactions may incur a penalty fee
- Rates may change without warning and the rate following an introductory rate may be lower than expected
- You may have to wait for some days before an online withdrawal is fully processed
Are High-Interest Savings Accounts Taxable?
Yes, the interest income you earn on your high-interest savings account is taxable income and it is taxed at your marginal tax rate.
The bank will send you a return of investment slip (T5) for your tax return filing purposes.
Income earned on savings in a TFSA account is not taxable.
Are High-Interest Savings Accounts Safe?
Yes, pretty much so. However, you should be aware of the maximum amounts covered by insurance.
Deposits at federally-regulated banks and financial institutions are protected by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 per insured account category e.g. HISA, TFSA, RRSP, and RRIF.
For savings accounts at provincially regulated entities e.g. credit unions and caisse populaires, insurance is provided through a provincial deposit guarantee corporation and this guarantee may be up to 100% of deposits i.e. without limit. Coverage varies by province.
What rates are you getting on your savings right now? Let us know in the comments.