High Interest Savings Accounts (HISAs) are becoming increasingly popular in Canada as people seek better returns on their savings. A HISA offers a higher interest rate than a traditional savings account and is a great way to grow your savings over time. In this article, we’ll take a look at the 10 best HISAs in Canada, their features, and what to consider when choosing one.
Table of the Best High Interest Savings Accounts in Canada
| Bank | Interest Rate | Minimum Balance | Pros | Cons |
|---|---|---|---|---|
| EQ Bank | 2.30% | $0 | No minimum balance, high interest rate, flexible options for transfers and deposits | Limited in-person support |
| Tangerine Bank | 2.10% | $0 | No minimum balance, high interest rate, mobile banking app | Limited in-person support |
| Alterna Bank | 1.90% | $0 | No minimum balance, competitive interest rate, full-service bank with ATMs | No access to US funds |
| Motive Financial | 1.90% | $0 | No minimum balance, competitive interest rate, no foreign exchange fees | Limited in-person support |
| Simplii Financial | 1.75% | $0 | No minimum balance, no foreign exchange fees, mobile banking app | Limited in-person support |
| CIBC | 1.50% | $1,000 | Full-service bank with ATMs, in-person support, US dollar account option | Higher minimum balance requirement |
| BMO | 1.50% | $1,000 | Full-service bank with ATMs, in-person support, US dollar account option | Higher minimum balance requirement |
| RBC | 1.50% | $1,000 | Full-service bank with ATMs, in-person support, US dollar account option | Higher minimum balance requirement |
| TD Bank | 1.50% | $5,000 | Full-service bank with ATMs, in-person support, US dollar account option | Higher minimum balance requirement, foreign exchange fees |
| National Bank of Canada | 1.45% | $5,000 | Full-service bank with ATMs, in-person support, US dollar account option | Higher minimum balance requirement, foreign exchange fees |
Comparison of Interest Rates
The interest rates offered by HISAs can vary greatly, ranging from 1.45% to 2.30%. EQ Bank offers the highest interest rate of 2.30%, followed by Tangerine Bank at 2.10%. Alterna Bank, Motive Financial, and Simplii Financial all offer interest rates of 1.90%. The big five banks in Canada – CIBC, BMO, RBC, TD Bank, and National Bank of Canada – all offer interest rates of 1.50%.
Unique Features of HISAs
One of the key benefits of a HISA is the higher interest rate, which allows your savings to grow faster. However, there are other unique features to consider when choosing a HISA, such as no minimum balance requirements, mobile banking apps, and no foreign exchange fees. For example, EQ Bank and Tangerine Bank both offer high interest rates and have no minimum balance requirements, making them a great option for those who want to start saving without having to worry about minimum deposit requirements.
- According to a survey conducted by the Bank of Canada in 2020, only 34% of Canadians have a HISA.
- In the same survey, only 11% of Canadians reported using a HISA as their primary savings account.
- A HISA can help you save more money in the long run. For example, if you had $10,000 in a HISA with an interest rate of 2.30% for one year, you would earn $230 in interest. If you had the same $10,000 in a savings account with an interest rate of 0.5% for one year, you would only earn $50 in interest. (Source: Bank of Canada)
HISAs have been available in Canada for several decades, but they’ve become increasingly popular in recent years as people seek better returns on their savings. In the past, HISAs were often offered by smaller banks and credit unions, but today they’re also offered by the big five banks in Canada.
In recent years, technology has had a big impact on HISAs. Many banks now offer mobile banking apps that make it easier to manage your HISA and make deposits and transfers on the go. Additionally, some HISAs now offer features such as round-up savings, where each purchase is rounded up to the nearest dollar and the extra change is automatically transferred to your savings account.
For example, let’s say you’re a young professional who wants to save for a down payment on a house. A HISA with a high interest rate, such as EQ Bank’s 2.30%, can help you reach your goal faster. You can set up automatic deposits each month and watch your savings grow over time.
Or, let’s say you’re a retiree who wants to save for travel. A HISA with no minimum balance requirement, such as Tangerine Bank’s 2.10%, can be a great option. You can deposit small amounts each month and earn a higher interest rate than you would with a traditional savings account.
Pros and Cons of HISAs
One of the biggest benefits of a HISA is the higher interest rate, which allows your savings to grow faster. Additionally, many HISAs offer flexible options for deposits and transfers, and some even have mobile banking apps.
However, there are some drawbacks to consider as well. For example, some HISAs have limited in-person support, and some charge foreign exchange fees. Additionally, some HISAs have higher minimum balance requirements, which can be a drawback for those who want to start saving with a small amount of money.
As technology continues to advance, we can expect to see more HISAs with mobile banking apps and other innovative features. Additionally, as interest rates continue to rise, HISAs may become even more popular as people seek better returns on their savings. It will be interesting to see how HISAs evolve in the coming years, and whether they continue to grow in popularity.
HISA is a great option for anyone looking to grow their savings over time. Whether you’re a young professional saving for a down payment on a house, a retiree saving for travel, or anyone in between, a HISA with a high interest rate and flexible options can help you reach your financial goals faster. Be sure to consider your unique needs and goals when choosing a HISA, and compare interest rates and other features before making a decision.