Best High-Interest Saving Accounts in Canada for October 2022
Most of the virtual or online banks in Canada (like EQ Bank, LBC Digital, Tangerine, Motive Financial) offer a High-Interest Savings Account with interest rates of 2% or higher. There are few traditional banks and credit unions that offer high-interest rates, but generally, they are for a promotional period.
If you have funds for some short term goal (such as a home down payment, vacation, wedding) or if you are saving for an emergency fund, parking that money in a High-Interest Savings Account or HISA is a great way to earn some extra cash without taking any big financial risk.
Although the interest rates of traditional banks are relatively very low, few online banks offer competitive interest rates typically over 2%. This is a great way to safeguard your money from inflation if you want to save up some money for the future.
So, choosing the right bank account or credit union in your province or territory is important if you want to utilize most of your money. In this article, you will learn everything that you need to know about high-interest saving accounts and the best options that are available to choose from in Canada.
Summary of Best High-Interest Saving Account In Canada for October 2022
Best Overall – EQ Bank Savings Plus Account (2.0%)
When it comes to high-interest saving accounts, EQ Banks offers one of the most competitive non-promotional rates in the market. EQ Bank Savings Plus Account currently offers an everyday high-interest rate of 2%. The interest is calculated on a daily basis on the total closing balance and is paid out monthly.
There are no minimum balance requirements when you open an account with EQ Bank. However, the maximum balance you can hold in your account is $200,000.
Account-holders can also enjoy other benefits like zero banking fees, unlimited Interac e-Transfers, unlimited electronic funds transfers, unlimited bill payments, unlimited EQ to EQ transfers with no additional charges. It also offers international money transfer with very minimal fees.
Along with high-interest rates offered for savings accounts, EQ bank also offers lucrative GIC rates up to 4.70%.
Although EQ Bank is relatively new to the market (launched in 2016), it’s backed up by their parent company Equitable Bank which is now Canada’s ninth largest independent bank (founded in 1970). Where it comes to safety, EQ Bank is a member of CDIC. Hence, all deposits in EQ Bank are CDIC insured up to an amount of $100,000.
You can open an account with EQ bank on their website. EQ Bank also has a very easy-to-use mobile app for quick access to your funds.
EQ Bank is not available in Quebec. Being an online-only bank, EQ bank does not have any physical branches or ATMs. Also, they do not offer debit cards.
- Interest Rate: 2.00%.
- Minimum Balance: None
- Banking Fee: Zero everyday banking fee
- Transaction Fee: Free
- Interac e-Transfer Fee: Free
- Safety: CDIC Insured
Due to the high-interest rate, low barrier to entry, no transfer fee, safety, and ease of use, EQ Bank Savings Plus Account definitely qualifies for the Best Overall high-interest savings account in Canada.
LBC Digital High-Interest Savings Account (2.0%)
LBC Digital used to offer the highest regular interest rate among all other financial institutes in Canada for a HISA until they cut down their rate twice since the pandemic started. Currently, their High-Interest Savings Account has a non-promotional annual interest rate of 2.0% on deposits up to and including $500,000. The interest rate becomes 0.30% on deposits over $500,000. These rates are still higher than most of the other banks in Canada.
Not only that, being an online bank, you also get other benefits like no minimum balance, zero monthly account fee, free cheque clearing, free electronic fund transfers, free Interac e-Transfers etc.
They also offer competitive GIC rates and chequing accounts.
Laurentian Bank of Canada is a CDIC member. So, eligible deposits up to a maximum of $100,000 (principal and interest combined) are protected by CDIC.
- Interest Rate: 2.00% up to $500,000, 0.30% thereafter
- Minimum Balance: None
- Banking Fee: Free
- Transaction Fee: Free
- Interac e-Transfer Fee: Free
- Safety: CDIC Insured
You can open an LBC Digital High-Interest Savings Account online by visiting the new customer registration page.
Best Promotional Rate – Tangerine Savings Account (4.25%**)
Tangerine, a subsidiary of Scotiabank, offers a promotional rate of 4.25% for its new customers for 5 months up to a maximum of $1,000,000. This is by far the highest promotional rate offered by any bank in Canada today. However, to avail the promotional rate you need to use promo code EARNMORE. Please visit Tangerine official website for more details on this offer.
After the initial promotional period, they offer a regular interest rate of 1.00%.
Tangerine really shines when it comes to the flexibility offered to its customers. Like any other online bank, they offer zero minimum balance and zero monthly fees. They also offer TFSA and RRSP accounts with similar promotional rates. They also have a competitive 1 year GIC rate of up to 4.70%.
You can also set up an Automated Savings Program (ASP) to plan and meet your savings goals.
Tangerine Savings Accounts are eligible for Canada Deposit Insurance Corporation (CDIC) insurance and are protected until the amount of $100,000 (principal and interest combined).
- Interest Rate: 4.25% for 5 months up to $1,000,000 (Limited Time Offer), 1.00% thereafter
- Minimum Balance: None
- Banking Fee: Free
- Transaction Fee: Free
- Interac e-Transfer Fee: Free
- Safety: CDIC Insured
You can open a Tangerine Savings Account online and avail the promotional rate here.
Motive Financial Savvy Savings Account (3.00%)
Motive Financial is the online division of Canadian Western Bank. They provide a very competitive interest rate of 3.00% in their high-interest savings account called Motive Savvy Savings Account.
The account comes with no minimum balance, no monthly fee, free deposits, unlimited transfers between accounts and 2 free monthly withdrawals.
Canadian Western Bank is a member of Canada Deposit Insurance Corporation. So, Motive Savvy Savings Accounts are eligible for deposit insurance through CDIC up to a maximum basic protection limit of $100,000.
- Interest Rate: 3.00% up to $500,000, 0.50% thereafter
- Minimum Balance: None
- Banking Fee: Free
- Transaction Fee: 2 free monthly transactions. Unlimited between Motive accounts.
- Interac e-Transfer Fee: $1 for each transaction
- Safety: CDIC Insured
You can open a Motive Financial Savvy Savings Account here.
MAXA Financial High-Interest Savings Account (2.60%)
MAXA Financial, a division of Westoba Credit Union Ltd, is an online financial institution that offers one of the best high-interest savings accounts in Canada at the rate of 2.30%. The interest is calculated on the daily closing balance and is paid monthly.
Their HISA comes with zero minimum balance and zero monthly maintenance fee and one free debit. However, they employ some transaction fees for transfers outside MAXA Financial accounts.
All the deposits in MAXA Financial High-Interest Savings Account are guaranteed 100% by Deposit Guarantee Corporation of Manitoba (DGCM).
- Interest Rate: 2.30%
- Minimum Balance: None
- Banking Fee: Free
- Transaction Fee: 1 free debit. Free transaction within MAXA Financial. Else chargeable.
- Interac e-Transfer Fee: $1.50 for each transaction
- Safety: Guaranteed by DGCM
You can open a MAXA Financial High-Interest Savings Account online here.
Oaken Financial Oaken Savings Account (3.00%)
A subsidiary of Home Trust, Oaken Financial is an online bank that offers a high-interest savings account that is very similar to EQ Savings Plus account. Oaken Savings Account pays a regular interest rate of 3.00% with no minimum deposit requirement. The interest is calculated daily and paid monthly.
Their account comes with unlimited withdrawals, unlimited transactions and unlimited Interac e-transfers and no monthly fee. The account can be used for commercial needs as well.
You can also set up automatic contributions to the Oaken Savings Account to meet your financial goals.
One more great thing about Oaken Financial is that they offer one of the best GIC rates up to 4.55%.
Home Bank and Home Trust Company are CDIC members. So, just like other banks in the list, the deposit amount in Oaken Savings Account is CDIC insured up to $100,000.
- Interest Rate: 3.00%
- Minimum Balance: None
- Banking Fee: Free
- Transaction Fee: Free
- Interac e-Transfer Fee: Free
- Safety: CDIC Insured
You can open an Oaken Savings Account online here.
Alterna Bank High-Interest eSavings Account (2.0%)
Alterna Bank is a subsidiary of Alterna Savings, one of the oldest Credit Union in Canada. Their High-Interest eSavings Account offers a non-promotional interest rate of 2.0%.
The account comes with no monthly fee, no minimum balance requirement, unlimited Interac® e-Transfers, unlimited bill payments, transfers and debits.
Alterna Bank High-Interest eSavings Account is accessible through both online and mobile app.
All eligible deposits in eSavings Account are insured up to the maximum amount of $100,000 through the Canada Deposit Insurance Corporation.
- Interest Rate: 2.00%
- Minimum Balance: None
- Banking Fee: Free
- Transaction Fee: Free
- Interac e-Transfer Fee: Free
- Safety: CDIC Insured
You can open an Alterna Bank High-Interest eSavings Account online here.
Best Traditional Bank – Scotiabank Momentum PLUS Savings Account (360-premium) (2.55%)
When it comes to major banks in Canada, Scotiabank takes first place in offering high-interest rates for its savings account. Scotiabank Momentum PLUS Savings Account offers tiered interest rates with a base rate of 1.35%. If the money in the account is kept untouched for an extended period of time, a higher interest rate gets applied.
Here is how you can earn up to 2.55%* interest:
- Regular Interest Rate (1.35%)
- Premium Period Interest Rate (up to 1.10%) – additional interest applies if the money is untouched for a premium period as mentioned below.
- 90-Day Premium Period (+0.85%)
- 180-Day Premium Period (+0.90%)
- 270-Day Premium Period (+1.00%)
- 360-Day Premium Period (+1.10%)
- Ultimate Package Interest Rate Boost (+0.10%) – if you take the ultimate package.
The Scotiabank Momentum PLUS Savings Account comes with no minimum balance requirement, zero monthly fee, unlimited transfers and CDIC insurance.
- Interest Rate: 1.35%
- Minimum Balance: None
- Banking Fee: Free
- Transaction Fee: Free
- Interac e-Transfer Fee: Free
- Safety: CDIC Insured
Applying for a Scotiabank Momentum PLUS Savings Account is easy and can be done online here.
CIBC eAdvantage Savings Account (1.25%**)
CIBC eAdvantage Savings Account offers a regular interest rate of 1.25%.
They also come with zero monthly fee and unlimited transfers within CIBC. However, other transactions like bill payment, debit purchases, ATM withdrawals, e-transfers, come with a transaction fee of $5.
Like any other bank, CIBC is a member of CDIC and thus deposits are insured up to an amount of $100,000.
CIBC is currently offering promotional interest rate of 4.25% for first 4 months when you open your first CIBC eAdvantage® Savings Account.
You can open a CIBC eAdvantage Savings Account online here.
Best Hybrid Account – Wealthsimple Wealthsimple Cash (1.50%)
Wealthsimple is a well-known name in Canada for its robo-advisor platform. They also offer a hybrid account called Wealthsimple Cash and offer a high-interest rate of 1.50%.
Being a hybrid account, it works like a combination of savings and chequing accounts and comes with perks like zero monthly fee, unlimited free transactions, free bill payments and free Interac e-transfers. You can also open a Wealthsimple joint account with the same interest rate.
One added feature is that you can connect your Wealthsimple Cash account to automated savings apps such as Roundup and Overflow.
All amounts in the Wealthsimple Cash account are held in an account with Canadian ShareOwner Investments Inc. They are a member of the Investment Industry Regulatory Organization of Canada. As a result, these accounts are protected by the Canadian Investor Protection Fund (CIPF) within specified limits.
You can open a Wealthsimple Cash in a few simple steps here.
Others
There are many other institutes that provide high-interest savings accounts. You can find the complete list here.
- Bridgewater Bank – Smart eSavings Account (2.75%)
- Ideal Savings Account (1.01%)
- Peoples Trust – eSavings Account (2.50%)
- Hubert Financial – Happy Savings Account (2.85%)
- AcceleRate Financial – AcceleRate Savings Account (2.85%)
- Achieva Financial – Achieva Savings Account (2.85%)
- Outlook Financial – High Interest Savings Account (2.85%)
- Wealth One Bank of Canada – High Interest Savings Account (3.00%)
- Motusbank – High interest savings account (2.10%)
What is a high-interest saving account?
As the name suggests, a high interest saving account or commonly known as HISA is a savings account that pays a better rate of interest than a regular savings account (typically between 20 to 25 times more). Just like a standard savings account, HISA pays interest on the deposits and offers easy access to your money. You might also see them referred to as high-yield savings accounts.
Most of the Canadians have held their savings account with the same financial institution where they hold their chequing account, which made the fund transfer easy and quick between these accounts. However, this has changed due to the increasing number of virtual or internet-only banks and their high-interest rates. Also, more and more international banks started to open up their online branches in Canada. This contributed to a rise in competition on savings rates, creating a new category of savings account called “High-Interest Savings Account”.
Today, many financial institutes, banks or credit unions offer High-interest savings accounts. Given the difference in the interest rates between HISA and regular saving accounts, the earning on your deposit can vary significantly.
For an example, it’s not uncommon to get a .02% interest rate on a traditional savings account, while interest rates on HISA can range anywhere from 0.9% to 2.0%. If you deposit $10,000 dollars, here’s how that difference plays out in real life after a year.
Type of savings account | Interest rate | Balance after one year |
HISA | 2.00% | $10,202 |
Traditional savings account | 0.02% | $10,002 |
That is a difference of $200 a year. It’s nothing significant, but it can add up to a significant amount over time.
Are high-interest savings accounts safe?
The short answer is yes. Most of the reputed financial institutes are members of Canada Deposit Insurance Corporation (CDIC) and are insured by CDIC up to a deposit amount of 100,000 CAD. This means if the financial institution that holds your money fails, you will be reimbursed with the money that you held (deposit amount plus interest accrued) with the financial institute by CDIC.
On the other hand, all deposits in Credit Unions are guaranteed 100% by their provincial deposit insurer such as Deposit Guarantee Corporation of Manitoba (DGCM), Deposit Insurance Corporation of Ontario (DICO) etc.
Are high-interest savings accounts taxable?
Yes. You have to pay income tax on interest earned on any savings account in Canada and a high-interest saving account is no exception.
You do not have to pay any tax on the deposited amount since it’s already been taxed. But, any interest accrued during the year on your deposit is subject to taxation in the same year.
Financial institutes are required to send you a return of investment income slip (T5) every year. T5 slip contains the details of your investment income throughout the year and this includes income you earned from the interest in all bank accounts.
This is why it’s recommended to max out your Tax-Free Savings Account (TFSA) before putting your money in a regular savings account.