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A high-interest savings account (HISA) is a bank account that offers a higher interest rate than the norm. This product is often chosen by those who are planning medium-term savings and require a higher interest rate to achieve their financial goals.
Of course, the ideal is to let your savings grow for as long as possible in a savings account offering the best interest rate.
Canadian chartered banks, cooperatives and insurance companies offer high-interest savings accounts. You can open a HISA with a financial institution even if you don’t do your day-to-day banking there.
The vast majority of HISA are free, with no monthly fees. However, accounts from the Big Five banks often charge a fee per transaction, which is not the case with digital banks.
There are a multitude of high-interest savings accounts offered by almost every Canadian bank, including BMO, National Bank, CIBC, Desjardins, RBC, Scotia, TD and Laurentian Bank.
Additionally, digital banks such as Achieva Financial, Alterna, EQ Bank, KOHO, Motusbank, Neo Financial, Oaken Financial, Tangerine and Wealthsimple also offer HISAs.
Milesopedia has taken a look at all the offers currently available on the market. Compare the offers in the table below and find all the details in the following sections.
Scotiabank is currently offering an attractive deal on its MomentumPLUS savings account.
Combine the BMO Savings Amplifier Account with the BMO Performance Chequing Account or BMO Premium Chequing Account for a great welcome bonus.
Key features:
The Tangerine savings account is one of the best savings accounts in Canada. First of all, there are no monthly fees and no minimum balance requirements. What’s more, you can open accounts in both Canadian and U.S. dollars.
KOHO is another digital bank that offers a high-interest savings account. Rates vary between 2% and 3.50%, depending on the plan chosen.
The main features of the KOHO savings account are :
The high-interest savings account from EQ Bank operates differently from traditional savings accounts. The Personal Account (formerly the Savings Plus account) operates like a chequing account, but earns interest like a savings account.
Laurentian Bank currently offers attractive (non-promotional) rates on its High Interest Savings Account (HISA).
Wealthsimple’s chequing account also acts as a high-interest savings account.
The interest rate offered in the Wealthsimple Chequing account varies between 1.25% and 2.25% annually. All clients receive a minimum of 0.50% interest, and can then qualify for higher rates based on their assets under management across all their Wealthsimple accounts.
Furthermore, the interest rate is increased by 0.5% (up to a total rate of 2.50%) if you choose Wealthsimple Chequing as the account for your direct deposits.
The main features of the account :
The high-interest savings account offers a higher return on your balance, as the name suggests. However, additional benefits often come from the bank’s promotional offers, such as high interest rates for a limited period or under certain conditions, such as a minimum balance requirement.
That’s why it’s essential to select an account based on your usual savings and banking habits, rather than simply opting for the account offering the highest interest rate.
For people with flawless financial management and an excellent credit rating, it’s possible to take advantage of high interest rates and credit card cash advances to generate passive income. Learn more in this guide:
Once you’ve chosen the high-interest savings account that’s right for you, be sure to check the minimum income and deposit requirements carefully.
The account can usually be opened in a few minutes via online banking or a mobile application, depending on the bank chosen.
To open a HISA, you’ll need a Social Insurance Number (SIN), as tax slips are issued every year.
Then you can transfer funds easily from your online account or the mobile application.
If necessary, you can also make an appointment with a bank advisor to open the account in person.
Financial institutions calculate interest rates differently according to their own criteria. It is therefore important to look at this detail. Some will pay interest into the savings account, considering :
Finally, interest can be compounded. You’ll earn more interest with an interest rate compounded daily than monthly.
In short, a high-interest savings account lets you save for short- and medium-term projects. In addition, a high-interest savings account is an ideal type of account to hold your emergency fund, also known as a contingency fund.
To assist you in your search for a bank account and a savings account that meet your needs and savings goals, you can use our comparators:
Finally, discover our strategies for managing personal finances in Canada.
Terms and conditions apply. For the most up-to-date product details, please visit Wealthsimple.com.
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