Whether you are saving up a down payment on a new home, for a dream vacation, home renovations, or just want the next high-tech gadget that “everyone” seems to have (without charging it to your credit card), placing your funds in a savings account with the highest interest rate possible is a must. After all, you want to get the biggest bang for your buck, and the only way to do this is with a good interest rate.
Unlike long-term savings accounts (i.e. retirement or education funds), high-interest savings accounts (HISA) aim to help you save money for a short-term goal, as in some examples listed above. They are accounts that have a high-interest rate, which is self-explanatory in their name; however, HISAs are also generally offered by less-traditional banks that don’t necessarily have “brick and mortar” locations like the five “big” banks across the country. The financial institutions that offer these accounts also conduct their customer service via the phone or online. The Interest rates for HISA range from 1% to 2.15%. Unlike GICs, your money is not “locked-in” with a HISA, so you can gain access to funds rather quickly if an emergency arises or they are needed for that dream vacation.
With that said, you may not have access to cheques on a HISA (but would you want to if the end goal is to save for something short term?) Additionally, these accounts charge small to no fees, and at times, unlimited transactions.
If you are looking to save some money, and a HISA interests you, below are some of the “best of the best” in Canada, as of November 2020.
Tangerine has a nice “welcome” offer to first-time clients when they open any type of account, which includes their savings account. Customers gain access to a 2.15% interest rate for six months, and a potential earning of an added $200 if they place a direct payroll deposit into the account. After that, you earn 0.15% interest; there are no monthly fees or service charges linked to the account. For more information, visit Tangerine Savings Account.
Motive Financial offers one of the highest interest rates across Canada for HISAs. They offer a 1.55% interest rate, with no monthly fees, no minimum balance requirements, free deposits, as well as 2 free withdrawals each month. After your two free withdrawals, you will pay $5 for every time you take out funds (this may act as a deterrent to take out money since the account is a “savings” one). Additionally, e-transfers are $1 each; transfers between Motive accounts are free. You can visit the Motive Savvy Savings Account for more information.
EQ Banking Savings Plus Account
An interest rate of 1.5% isn’t too shabby. Add to that, zero everyday banking fees, free Interac e-transfers, and no minimum balance requirements, and the EQ Banking Savings Plus Account looks like a viable HISA option. They also tout “cheap” international money transfers. Check out the EQ Banking Savings Plus Account for more details!
LBC Digital High-Interest Savings Account
Owned by the Laurentian Bank, LBC Digital offers a solid rate of 1.5% on their HISA, with no minimum balance or monthly fees. It provides a great savings account to watch your money grow. With that said, they do offer a tier-system when it comes to high-interest rates, where accounts that have $0-$500,000 funds earn a 1.5% rate, and anything above $500,000 earns 0.5%.
Cheque clearing is free of charge on this account, as well as electronic transfers, pre-authorized deposits, monthly statements (both paper and online), as well as transfers between LBC Digital accounts. For more information, visit LBC Digital High-Interest Savings Account.
Alterna Bank High-Interest eSavings Account
A rate of 1.2% may not be as high as some others on the list, but it is still a decent number, and far higher than a “conventional” Canadian bank. With Alterna’s High-Interest eSavings account, clients can access unlimited (and free) debits, transfers, and bill payments. They also offer free unlimited Interac transfers. No minimum balance is required, and Alterna offers a great mobile app so clients can track what is going on in their account, 24/7. For more information, you can visit Alterna Bank High-Interest eSavings Account.