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The Best High-Interest Savings Accounts for Canadians in 2023

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Saving money over time

Maintaining a cash cushion is a key component of good financial management, both positively and negatively.

In This Article

On the one hand, cash liquidity will protect you against unexpected emergencies. On the other hand, it can help you take advantage of spur-of-the-moment investing opportunities.

That said, if you’ve got your cash buffer in an account earning 0.01% interest, you are doing your money a disservice. In fact, with an interest rate that low, your money is losing value due to inflation.

Fortunately, you have options. Even in Canada’s current low-interest-rate environment, various banks offer interest on cash savings at a rate far higher than 0.01%, and we’ve compiled a list of the best high-interest savings accounts in Canada below.

In this WealthRocket article, we’ll provide the best high interest rates in Canada that can help you save your money much more effectively while beating inflation.

The Best High-Interest Savings Accounts in Canada for 2022

Savings accounts with higher than average interest rates are called high-interest savings accounts. These accounts, known in shorthand as HISAs, usually have several common features, including no minimum balance requirements, low monthly fees, and (of course) attractive interest rates. We’ve hand-selected the best high-interest savings accounts in Canada and listed them below.

A note on safety: Each financial institution listed below is a member of the Canada Deposit Insurance Corporation (CDIC), which provides insurance on your deposits up to $100,000 per account.

So if you haven’t heard of a bank or financial institution listed below, rest assured that they are 100% safe to use.

1. Best High-Interest Savings Account: EQ Bank Savings Plus Account

  • Interest Rate: 1.25%*
  • Monthly Fee: $0
  • Monthly Transactions: Unlimited
  • Monthly Transfers: Unlimited
  • Minimum Balance: None
  • Available in Quebec: Non

EQ Bank is an online bank launched by Equitable Bank in 2016. As an entirely online bank, there are no brick-and-mortar branches. EQ Bank operates entirely online.

Guaranteed Investment Certificates (GICs) and savings accounts (both registered and non-registered) are the only banking and investing products that they currently offer. Additional products offered through EQ Bank include international money transfers and mortgages.

Due to this simplified product offering, EQ Bank can offer an industry-leading 1.25%* interest on all deposits. This interest rate is not a promotional rate and is available to both individual and joint savings accounts.

*Rates current as of June 2021

2. Best High-Interest Savings Account for Millennials: Alterna Bank

  • Interest Rate: 1.00%*
  • Monthly Fee: $0
  • Monthly Transactions: Unlimited
  • Monthly Transfers: Unlimited
  • Minimum Balance: None
  • Available in Quebec: Oui

Although not as well known as some of the other financial institutions on this list, Alterna Bank has provided Canadians with banking solutions for 110 years and even won the Globe and Mail endorsement for Canada’s Best Bank for Millennials.

Alterna Bank is not technically a digital-only bank, with branches across Ontario and Quebec. Still, you’ll access their high-interest savings accounts purely through their digital interface, a simple and easy to use app available through the App Store and via Google Play.

Beyond high-interest savings accounts, Alterna Bank also offers no-fee accounts, RRSP and TFSA eSavings Accounts, mortgages, investments, and GICs. The wide range of products makes this innovative bank an excellent choice for either a high-interest savings account or your go-to primary bank.

*Rates current as of June 2021

3. Best Interest Rate: Laurentian Bank of Canada

  • Interest Rate: 1.15%*
  • Monthly Fee: $0
  • Monthly Transactions: Unlimited
  • Monthly Transfers: Unlimited
  • Minimum Balance: None
  • Available in Quebec: Oui

Laurentian Bank of Canada offers an online arm called LBC Digital services. Through LBC Digital, you can open a high-interest savings account that earns a competitive 1.15%* interest on all deposits.

There is no monthly fee associated with this account and no minimum balance. You’ll be able to fund this account by linking it with your other financial institutions or transferring money directly from an LBC Digital chequing account.

As a digital account, there are no branches associated with this account.

*Rates current as of June 2021

4. Best Hybrid Account: Wealthsimple Cash

 

  • Interest Rate: 0.50%*
  • Monthly Fee: $0
  • Monthly Transactions: Unlimited
  • Monthly Transfers: Unlimited
  • Minimum Balance: None
  • Available in Quebec: Non

Wealthsimple is best known for its pithy advertising and low fee robo advisor investing products. Still, recently they’ve entered the space of high-interest savings accounts with a product they call Wealthsimple Cash.

Wealthsimple Cash is a hybrid savings and chequing account that you can use for daily spending but still earn a hefty 0.50%* interest – an unheard-of rate for a chequing account. You can fund this account from other financial institutions, and soon you’ll be able to make purchases directly from the account or withdraw money from ATMs using an attractive Tungsten metal card.

Wealthsimple Cash is still in its infancy, and the lack of available features limits this account’s usefulness.

For example, you cannot yet open a TFSA or RRSP with Wealthsimple Cash.

Many of the touted features aren’t yet available, like compatibility with Apple Pay and Google Pay, no foreign exchange fees, or even access to the debit card. Without these features, the interest rate is not attractive enough to recommend this product as your go-to choice for a high-interest savings account.

However, many of Wealthsimple’s additional products still make this a suitable account. Plus, it still provides a higher interest rate than most major banks.

*Rates current as of June 2021

5. Best for Registered Accounts: Oaken Financial

  • Interest Rate: 1.15%*
  • Monthly Fee: $0
  • Monthly Transactions: Unlimited
  • Monthly Transfers: Unlimited
  • Minimum Balance: None
  • Available in Quebec: Oui

Founded in 2013, Oaken Financial is part of Home Trust, one of Canada’s largest mortgage lenders. Oaken Financial has physical branches in Halifax, Toronto, Calgary, and Vancouver, where you can open an account in-person and earn 1.15%* on your deposits. That said, you can do all of your banking through their digital portal, where they offer GICs and high-interest savings accounts for both personal and commercial customers.

You can open both TFSAs and RRSPs through Oaken Financial and choose whether to save your money in a high-interest savings account yielding 1.15%* or, if you have at least $1,000 to deposit, lock your money into a GIC where it will earn up to 2.20%* over five years.

*Rates current as of June 2021

6. Best Online High-Interest Savings Account: Motive Financial

  • Interest Rate: 1.25%*
  • Monthly Fee: $0
  • Monthly Transactions: 2 free transactions per month
  • Monthly Transfers: Unlimited
  • Minimum Balance: No
  • Available in Quebec: No

Haven’t heard of Motive Financial? You’re not alone, but you don’t need to worry about the legitimacy of this new online bank. Before 2017, Motive Financial was Canadian Direct Financial. It is the direct banking arm of Canadian Western Bank, a Schedule I bank founded in 1984 in Edmonton, Alberta.

Motive Financial offers both chequing and savings accounts to their customers, and the Motive Savvy Savings Accounts offer 1.25%* interest on all deposits.

Unlike some other financial institutions on this list, Motive Financial limits the monthly transactions on its savings accounts to two per month.

Still, in my experience of using online savings accounts, you’ll only make transfers a few times a month. You’ll pay $5 per additional transaction.

*Rates current as of June 2021

7. Best Promotional Rate: Tangerine Bank

  • Interest Rate: 2.10% (Promotional), 0.10% (After)*
  • Monthly Fee: $0
  • Monthly Transactions: Unlimited
  • Monthly Transfers: Unlimited
  • Minimum Balance: $0
  • Available in Quebec: Oui

The original online bank, Tangerine, used to go by the name of ING Direct before Scotiabank purchased them in 2012. Today, Tangerine is one of the most popular online banks in Canada. It offers various financial services from chequing and savings accounts, investments, credit cards, lines of credit, and even mortgages.

Their comprehensive product line does not mean they offer the best rate. When you open a Tangerine savings account, you’ll earn 2.10%* on all new deposits for the first five months, but after that, your interest rate drops to just 0.10%*. While Tangerine is accessible and an excellent place to do your daily banking, there are other banks with higher rates.

*Rates current as of June 2021

8. Best for Additional Products: Simplii Financial

  • Interest Rate: 0.10%*
  • Monthly Fee: $0
  • Monthly Transactions: Unlimited
  • Monthly Transfers: Unlimited
  • Minimum Balance: No
  • Available in Quebec: Non

Simplii Financial is the digital banking arm of CIBC. While Simplii is relatively new to the online banking scene, they do offer a wide variety of useful products.

Unfortunately, after the promotional rate expires, the interest rate drops to 0.10%, which is not competitive with some of the alternatives we’ve listed above. That said, it’s still a higher rate offered to most major banks.

However, Simplii does offer a full suite of financial products and free access to all CIBC ATMs across Canada, along with unlimited debit purchases, bill payments, and withdrawals.

This flexibility makes Simplii a good choice as a digital bank, but not the best place to deposit your cash.

*Rates current as of June 2021

 

 

9. Best Tiered Interest Savings Account: Scotiabank MomentumPlus Savings Account

  • Interest Rate: Tiered
  • Monthly Fee: None
  • Monthly Transactions: Unlimted
  • Monthly Transfers: Unlimited (Self-Serve)
  • Minimum Balance: None
  • Available in Quebec: Oui

Scotiabank is one of Canada’s largest, oldest, and most reputable banking institutions. The Scotiabank MomentumPlus Savings account represents an outstanding savings account option from a major bank. More often than not, major banks do not offer good interest rates, but Scotiabank provides a decent banking option.

As a tiered account, Scotiabank offers a base interest rate of 0.05%*.

Additionally, Scotiabank offers four rate options depending on the duration of the amount of money placed into the account, starting at 0.15%* for 90 days, 0.25%* for 180 days, 0.35%* for 270 days, and 0.45%* on 360 days.

The Ultimate Package comes with an additional 0.10%* interest on deposits. And, until August 31, 2021, a bonus interest rate of 1.20%*.

Interest is calculated daily and paid to the account holder every month.

What is a High-Interest Savings Account?

A high-interest savings account pays higher interest than a “regular” savings account. Most regular savings accounts offer an interest rate of around 0.05%, while the average high-interest saving account has an interest rate closer to 2%.

Banks can offer these higher interest savings accounts with the aim that you will deposit your money and leave it in the account to grow.

To further this agenda, some banks will limit how often you can withdraw cash, such as charging fees in the range of $5 per withdrawal.

These limits encourage you to leave your money in the account where it will earn interest.

That said, many online banks that do not have high costs associated with physical locations can offer higher interest rates and unlimited withdrawals.

Some online banks only offer high-interest savings accounts, and they often have the best rates in Canada.

How Does a High-Interest Savings Account Work?

Opening a high-interest savings account is straightforward and can be completed online.

You’ll need to provide basic information, including your email, home address, full name, and Social Insurance Number (SIN).

You’ll also need to provide information on the purpose of the savings account and whether you will share it with anyone else. The process usually takes about 15 minutes.

When your account is open, you can choose to fund your account by linking to your other financial institutions or using e-transfer.

This process of linking your bank account can take several days. Once you transfer money into the account, it will accumulate interest.

If there is a promotional interest rate available, you’ll earn that higher rate, and once it expires, your money will earn interest at the account’s regular rate. Most high-interest savings accounts debit their interest earned monthly.

Types of Saving Accounts Available in Canada

Canadians are fortunate to have several savings tools at their disposal. Savings accounts are no different. Knowing what types of savings accounts are available will make a big difference in wealth.

Below, we’ll take a look at registered and non-registered savings accounts.

Registered

Registered savings accounts are registered with the government of Canada. They usually come with a yearly contribution limit and do not tax the amount deposited, with certain exceptions.

The two most common types of registered savings accounts include the Tax-Free Savings Account (TFSA) and the Registered Retirement Savings Account (RRSP).

A Tax-Free Savings Account (TFSA) works a lot like a savings account. However, while the words “savings account” is in its name, it acts more as a tax-shelter for a variety of investments, such as stocks, bonds, mutual funds, ETFs, and more. When it comes to holding cash savings, however, all interest earned in a TFSA is untaxed. A TFSA comes with a yearly contribution limit and a max contribution limit specific to each person. It permits unlimited yearly tax-free withdrawals and deposits, with some restrictions.

On the other side of the coin is the Registered Retirement Savings Plan (RRSP). An RRSP works similarly to a TFSA. It can hold the same types of investments that an RRSP can hold. It also has a yearly limit specific to the person whose name it’s in. However, while RRSP withdrawals are taxable, it has significant benefits for savings and investing. Interest earned in RRSP savings accounts is untaxed until withdrawal.

Non-Registered

Non-registered savings accounts are any accounts not registered with the Government of Canada. A traditional savings account and a high-interest savings account are accounts that are not registered with the Canada Revenue Agency (CRA). Margin accounts and chequing accounts are also not registered with the CRA and technically non-registered accounts.

While there are no tax incentives on these accounts, there are no contribution limits either. Still, any interest or capital gains earned are subject to taxation.

How to Choose the Right High-Interest Savings Account

There are several factors that you should consider when choosing the right high-interest savings account, including:

Fees

Fees can be a make or break when comes to doing business with a bank or financial institution. Make sure before signing up that there are no service fees or transaction fees when opening an account.

Interest rate

If your primary goal is to earn more interest, choose a high-interest savings account that offers a higher rate before bonuses or promotions.

Safety

Your returns guarantee a high-interest return in a high-interest savings account, and your funds are CDIC insured up to $100,000 if the bank is a member.

Flexibility

Are you looking for more than just a high-interest savings account? What about TFSAs, RRSPs, GICs, or chequing accounts? If these additional products are essential to you, choose an institution that offers them, even if their interest rates are slightly lower. After all, you might use a HISA as an emergency fund.

Bonuses

Some banks offer cash bonuses or higher rates for new deposits. While these bonuses are usually short-lived, they might be enough to tip your decision in a specific direction.

Our Final Thoughts

High-interest savings accounts are excellent savings tools. Using one can maximize the interest-earning potential on your money without the withdrawal limitations or delays that come with other types of accounts.

High-interest savings accounts also help keep your money’s value in pace with inflation. Considering that the value of money goes down each year, inflation can retain its value.

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