Best High-Interest Savings Accounts In Canada For April 2024

• Simplii Financial High Interest Savings Account – 6%  for five months, then 0.40% up to $50,000. (Must apply by April 30, 2024)
• 4.20% – Saven Financial  High Interest Savings (Ontario only)
• 4.10% – Motive Financial Savvy Savings (Not in Quebec)
• 4.00% – Neo Financial High-Interest Savings, Wealthsimple Cash Account, Wealth One Bank of Canada High-Interest Savings
• 3.70% – Canadian Tire Bank High-Interest Savings

*Current as of April 10, 2024.

We’ve compared 123 savings accounts at 19 nationally available banks and credit unions to find some of the best high-interest savings options available. See below to learn more about why we picked each account, the pros and cons, and to access individual bank reviews.

Annual percentage yields (APYs) and account details are accurate as of February 27, 2024.

To create this list, Forbes Advisor analyzed 123 savings accounts at 39 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each account on 17 data points within the categories of fees, access, customer experience, digital experience, annual percentage yield, plus the minimum deposit and balance needed to avoid the monthly fee.

The following is the weighting assigned to each category:

• APY: 70%
• Fees: 10%
• Customer experience: 5%
• Digital experience: 5%
• Minimum Deposit: 5%
• Minimum Balance to avoid monthly fee: 5%

Specific characteristics taken into consideration within each category included monthly fee, ability to waive the monthly fee, overdraft fee, NSF fee, other fees, ATM network, branch access, Better Business Bureau rating, Trustpilot rating, live chat availability, mobile app ratings, online bill pay availability, online banking access, minimum deposit requirements and minimum balance requirements.

Savings accounts offering no or very low fees scored the highest, as did those offering low minimum requirements and high annual percentage yield, customer service and digital experience scores. To appear on this list, the savings account must be nationally available.

Our research is based on information from the following financial institutions: RBC, TD, BMO, National Bank, CIBC, Scotiabank, UNI Financial, Canadian Western Bank, Coast Capital Savings, Digital Commerce Bank, EQ Bank, First Nations Bank of Canada, Laurentian Bank, Manulife Bank, Motus Bank, Peoples Bank of Canada, Simplii Financial, Tangerine Bank, VanCity, VersaBank, HSBC, ICICI Bank Canada, SBI Canada Bank, CTBC Bank, Bank of China (Canada), KEB Hana Bank Canada, Shinhan Bank Canada, Meridian Credit Union, Servus Credit Union, Envision Financial, Steinbach Credit Union, Affinity Credit Union, Prospera Credit Union, Conexus Credit Union, ConnectFirst Credit Union, Access Credit Union, Assiniboine Credit Union.

A high-interest savings account or HISA (also known as a high-yield savings account) is a savings account that offers a high annual percentage yield (APY) on the money within, so that your savings are always generating a high rate of interest. Other savings accounts may not generate interest at all or may only generate a nominal amount, (as little as 0.01%) while high-interest savings accounts will give you an APY of 2.50% or higher. You will typically find high-interest savings accounts offered by online, branchless banks or credit unions because they don’t have the same expenses and overhead as Canada’s Big Five Banks or other brick and mortar financial establishments, so they can pass on the savings on to their customers in the form of a higher than average interest rate.

HISAs vs. TFSAs

All income generated from the interest rate on a high-interest savings account (HISA) is taxable as income, but deposits and withdrawals, whether placed in an interest-bearing investment vehicles or not, are not taxed when coming from or going into a tax-free savings account (TFSA) up to the account holder’s individual annual contribution limit.

HISAs vs. RRSPs

While all investment growth generated from a high-interest savings account (HISA) is taxed as income, the contributions made to a registered retirement savings plan are not taxed on deposit up to the account holder’s annual contribution limit, but they are taxed on withdrawal. You can deposit or withdrawal money from a HISA at any time, while an RRSP requires you to stop making contributions by the last month of the year you turn 71 and convert the account into a Registered Retirement Income Fund (RRIF).

HISAs vs. Chequing Accounts

While high-interest savings accounts offer at least a 2.50% APY, very few chequing accounts offer interest on balances at all in Canada. It’s just as well, since a chequing accounts are meant to be used to pay your bills and take care of your various everyday transactions, while savings accounts are meant to be a place where you store your money for your long-term savings goals or for a financial emergency.

HISAs vs. GICs

While HISAs do offer higher APYs than what other savings accounts may give you, their interest rates don’t beat those of Guaranteed Investment Certificates (GICs). However, in exchange for a higher guaranteed stable interest rate, you must lock your savings into a GIC for at least one to five years. Term deposits operate similarly, but have a shorter minimum time horizon of 30 days to five years. Canadians find GICs attractive because they are lower risk than other investments, such as stocks or mutual funds, so you will get a guaranteed return on investment as long as you don’t need access to your money over the duration of the term specified. People who prefer HISAs want a high APY, but also want to be able to transfer their money from the HISA if they need to. A GIC doesn’t give you that option over the span of the investment.

HISAs vs. Regular Savings Accounts

While regular savings accounts often are just a place to park your money while your saving for the future — either generating very little interest on your contributions or no interest at all, high-interest savings accounts do generate a high amount of interest allowing your money to compound over time and generate even more money than your initial investment. To encourage saving and not spending, high-interest savings accounts usually have minimum balance requirements that require you to maintain a certain monetary balance to avoid monthly fees. They also carry a number of transaction fees to deter you from moving money out.

Learn more: What Is A High-Interest Savings Account?

High-interest savings accounts (HISAs) work the same as traditional savings accounts, except they typically earn higher interest rates and carry lower or no monthly fees. Common features of high-yield and traditional savings accounts include CDIC protection up to $100,000 and transaction limits.

High-Interest Savings Account Rules

While there are no explicitly stated rules associated with a high-interest savings account, in exchange for a high APY you may need to maintain a minimum balance or pay a regular fee, but whether you have to do both of those things at all and what those fees or that minimum balance amounts to, depends on the account you choose.

How Do High-Interest Savings Accounts Earn Interest?

High-interest savings accounts grow using compound interest calculated daily. Compounding interest is the daily interest earned and then added to the principal amount of money you put into the account. The interest is then calculated based on the principal amount plus the interest earned over the previous days, so the account holder is earning interest on their interest. Therefore, if you have a principal amount of $1,000, but you make no regular contributions in addition to that and you have an APY of 2.5% with interest calculated daily, by the end of the year you will have $1,025.31 in your account. The best high-interest savings account in Canada offers an APY of 5.50%. If nothing else changed and that was your APY, by the end of the year you would have $1,056.54. Now, if you contributed just $100 every month to your $1,000 with the 5.50% APY, by the end of the year you’re looking at $2,290.05–over double your initial principal investment. Try this exercise yourself and adjust your principal investment, your contribution amount, how frequently you make it, your APY and how often it is calculated using Forbes Advisor’s Compound Interest Calculator.

High-Interest Savings Account Investments

While you can deposit straight up cash into a high-interest savings account. There are often companion options for registered accounts like RRSPs and TFSAs that also offer high interest rates. You can also choose to forgo a high-interest savings account all together in favour of an investment option that may give you even more interest, such as a GIC, term deposit, GIC, stock, bond or mutual fund. Each of these investment types carry a different level of investment risk depending on what you invest in and your overall time horizon for investment maturity. They are also able to be put inside a registered account, so they will get all the tax and/or matching benefits that come with that.

High-Interest Savings Account Taxes

Interest earned on a high-interest savings account is considered taxable. The bank will send you a T5 at the end of every tax year and that must be submitted when you file your taxes with the CRA. The only exception is if your high-interest savings account is a registered account where taxes may be deferred until you withdraw the funds, like with an RRSP, tax-free all the time, like with a TFSA or RDSP, or taxable when paid out to the beneficiary, like with an RESP.

Good candidates for a high-interest savings account have money to invest, are able to make contributions to their savings either daily, weekly, monthly or quarterly to help the growth of their investment along, still need access to their money all the time and want to see growth on their initial investment that’s more than nominal and happens automatically thanks to compounding interest. If you like the idea of the money in your savings account growing at a stable rate without you having to make any kind of contribution, but you need access to your money and can’t afford to keep it locked in a GIC for a specified term, then a high-interest savings account may be for you.

You can open a high-interest savings account relatively quickly. Once you’ve found an account that matches your needs, you’ll need to fill out an online application. The bank may ask for this specific information to verify your identity during the application process:

• Name
• Address
• Email address
• Phone number
• Date of birth
• Social Insurance number  (SIN)
• Number from your driver’s license or other government-issued photo ID
• Funding source account information
• If you’re opening a joint account, both parties will need to provide personal and financial information.
• Once the account is approved, you can fund it using a linked bank account or other acceptable methods.

Because of their earning potential, high-yield savings accounts are excellent for reaching savings goals. Having a specific account for savings goals allows you to keep those funds separate from your everyday spending account. You can use a high-yield savings account to save for a variety of goals, including:

• An emergency fund
• Upcoming vacations
• A wedding
• Home renovations
• Home furnishings
• A down payment on a home
• A new car
• Educational expenses

High-interest savings accounts are ideal for short-term financial goals, but they’re not good for holding your retirement savings. A registered account, like an RRSP or TFSA, typically offers better returns and tax savings not found with regular high-interest savings accounts.

Large Expenses

High-interest savings accounts can be used to save for a variety of large expenses. Some of the goals you might save for include:

• A down payment on a home
• Home renovations or repairs
• A new car or recreational vehicle
• Wedding expenses
• New furniture

You could also use a high-interest savings account to hold your emergency fund. Emergency funds are generally best kept in an account that’s liquid and easily accessed, in case you need money quickly.

Education

A high-interest savings account is something you might consider if you want to set aside money for education expenses. Some of the expenses you could save for include:

• Private school tuition and fees for elementary, middle or high school students.
• Extracurricular costs, such as band instruments, travel expenses for competitive sports or class trips.
• College tuition and fees
• In-school living expenses, such as meals or rent

If you specifically want to save money for college, you might consider an RESP in place of a high-interest savings account. With an RESP, you can invest money for your dependent’s post-secondary education, get your contributions matched by the federal government and withdraw it for qualified educational expenses when the beneficiary becomes a student  at a qualifying post-secondary institution and likely won’t be paying taxes anyway.

Vacation

High-interest savings accounts are also an attractive place to save money for vacations or travel. You might use a high-interest account to save for:

• Flights
• Hotel or resort stays
• Local transportation
• Meals
• Souvenirs
• Entry fees for attractions or experiences

You could use a travel rewards credit card to pay for those expenses and potentially earn some money back in the form of travel miles or points. However, if you end up carrying a balance month to month, your credit card’s APR could wipe out the value of any rewards you earn.

If you’d rather earn interest than pay it, you might be better off saving for vacation plans with a high-interest savings account instead.

Choosing the best high-yield savings account isn’t always obvious, so comparing accounts will help you find the best option. Here are some factors to consider before opening an account.

Reputation and Security

Pick a bank or credit union you feel comfortable with that has a solid foundation and a great, stable reputation. This will likely lead to the most important component which is making sure the bank or credit union you choose is insured so if the bank becomes insolvent, your investment is covered up to $100,000.

Financial Goals

You’ll also need to think about why you’re opening an HISA in the first place. What are you actually saving for? This will dictate your timeline and determine the interest rate that you’ll be looking for and how high it needs to be for you to reach your goals in the timeframe you have in mind. To that end, you’ll also need to make sure you’ll still be able to access your account when you meet your goal.

Interest Rate

Perhaps the most important factor when choosing a high-interest savings account is the interest rate. Earning a higher interest rate will help you maximize your savings more quickly.

Deposit Requirements

Some accounts require certain minimums for a new account. You may need to maintain a specific balance to earn interest or avoid monthly fees.

Account Fees

Fees can cancel out interest earned on your savings. Check the account’s fee schedule to determine if you’ll be charged a monthly service fee or other fees. Some banks will waive fees if you keep a certain amount in your account.

Compounding Frequency

Interest on a savings account can compound daily, weekly, monthly, quarterly or annually, depending on the bank. When interest compounds, you earn interest on your interest. Choosing an account that compounds more frequently can help you earn more interest over time.

When the Bank of Canada’s (BoC) overnight interest rate rises, the prime rate follows suit at Canada’s banks. Once that happens, you can expect interest to rise according to the prime rate on all interest-bearing investment products and you can take advantage when the interest rises on your HISA. Conversely, if the BoC cuts rates and the overnight rate goes down, so too does the prime rate, which will reduce the amount of interest you can earn on an HISA.

• Savings accounts
• Online savings accounts
• Tax-free savings accounts (TFSAs)
• Registered retirement savings plans (RRSPs)
• Guaranteed investment certificates (GICs)