When there is a need to set aside a certain amount of money for future needs and goals, the best option is a savings account. There are countless ways and reasons to save money in banks. While some save for retirement, others may prefer to keep their money for weddings or home renovations.
Unlike chequing accounts, you can deposit money for safekeeping with a savings account and still earn considerable interest on your deposits. With the different types of savings accounts available, it is imperative to find the one that can give you the best interest rate.
As savings accounts allow for limited transactions, you should ensure your money is kept where it will yield good interest and easily accessible when needed. That’s why we compiled an extensive list of outstanding savings accounts with the best rates in Canada. You can sort these savings accounts based on your preference.
First, let’s take a look at some important elements of a good savings account.
What Is a Savings Account?
A savings account is a deposit account issued by banks, credit unions, and other financial institutions to hold money meant for short, medium, or long term goals. Unlike chequing accounts, traditional savings accounts yield interest on deposits and usually come with a limited number of transactions.
Canadians looking to make better money decisions and financial plans use a savings account to maintain regular expenses and grow their future savings.
When it comes to comparing savings accounts, you should consider interest rates, ease of use, transaction fees, and accessibility of the funds. There are several savings accounts in Canada with no transaction fees and high-interest rate offers. You can earn an interest rate from 0.50% to 2.75% on your savings account, more than some standard chequing accounts.
How Savings Accounts Work
A savings account is meant to help you keep the money until when needed for specific purposes. It’s a simple process to open and maintain a standard savings account in Canada. Open a savings account with a bank or credit union and deposit money into the account.
Most times, banks and financial institutions use this money for other transactions. As a result, the bank pays you interest on your account balance. The annual percentage yield (APY) on your savings account balance may vary from bank to bank and from account to account.
Types of Savings Accounts in Canada
For every financial purpose, there is a suitable savings account available for Canadians.
Disclaimer: Rates and product offerings are always changing so this article might not reflect the current market situation. Please contact your financial advisor before making any financial decisions.
High-Interest Savings Accounts
Also known as HISA, high interest or high yield savings accounts pay a high-interest rate compared to other regular savings accounts. In Canada, the best interest rates currently on the market are about 2.25%.
You’re more likely to find high-interest savings account at online financial service providers.
While some high-interest savings accounts offer a consistent high Annual Percentage Yield (APY), others may offer limited period or promotional interest rates.
Best High-Interest Savings Accounts in Canada
Tangerine Savings Account
The Tangerine savings account is high-interest savings account with a promotional interest rate of 2.10% and a regular interest rate of 0.10%. This account comes with no minimum balance requirement and zero monthly fees.
EQ Bank Savings Plus Account
The EQ Bank savings plus account is the best no service fee high-interest savings account. The savings account gives you a 1.50% regular interest on every dollar in your balance. It comes with zero minimum balance, zero everyday banking fees, and cheap international money transfers.
MAXA Financial High-Interest Savings Account
This high-interest savings account has the best regular interest rate among credit union HISAs. It has a regular interest rate of 1.30% and no monthly maintenance fee.
Motive Financial Savvy Savings Account
The Motive Financial Savvy Savings Account has the best regular interest rate among online banks. It comes with a regular interest rate of 1.550% for a $0 to $5,000,000.00 account balance with zero minimum balance and no monthly fees. If you have a balance of $5,000,000.01 and over, you’ll enjoy a 0.500% regular interest rate.
Oaken Financial Savings Account
At a 1.25% regular interest rate, the Oaken Financial high-interest savings account has one of Canada’s highest daily interest rates. It comes with no transaction limit and online banking features.
Scotiabank Momentum Plus Savings Account
With the Momentum Plus savings account from Scotiabank, you can earn up to 0.75% interest. That is a regular interest of 0.05%, the Premium Period interest of up to 0.60%, and an Ultimate Package interest of 0.10%.
Note: These rates are subject to periodic changes at the discretion of the issuing banks.
Tax-Free Savings Account (TFSA)
A tax-free savings account (TFSA) is a savings and investment account that yield tax-free interests on your balance. TFSA can hold cash savings and several financial instruments such as Bonds, ETFs, Stocks, Mutual Funds, and more.
Best Tax-Free Savings Accounts in Canada
The Tangerine Tax-Free Savings Account comes with a promotional interest rate of 2.10% for first-time accounts within the first five months of account opening. It also comes with a regular interest rate of 0.10%. This account comes with no monthly fees, no transaction fees, and zero minimum balance.
Alterna Bank Tax-Free Savings Account eSavings Account
As a digital bank in Canada, Alterna offers a tax-free eSavings account with a 2.00% interest rate. The account comes with no minimum balance and unlimited free transfers.
Motive Financial TFSA Savings Account
The Motive Financial Tax-Free Savings Account has a regular interest rate of 1.550%. The account comes with no minimum balance and tax-free returns.
People’s Trust Tax-Free Savings Account
The People’s Trust Tax-Free Savings Account comes with 1.35% interest. The account comes with tax-free returns, daily interest calculations, no transfer or service fees, and tax-free funds withdrawal.
Implicity Tax-Free Savings Account
The Implicity Tax-Free Savings Account combines all the benefits of high-interest savings account with the bonus of tax-free returns. It comes with a regular interest rate of 1.35% and zero minimum balance.
Note: These rates are subject to periodic changes at the discretion of the issuing banks. TFSA is available to Canadian citizens and residents of age 18 and above.
Registered Retirement Savings Plans (RRSP)
A registered retirement savings plan is a retirement and financial account designed for savings and investments. The government introduced the registered retirement savings plan account to help the Canadian plan and save for retirement. The RRSP has a tax-free savings and growth plan and taxable withdrawals. Just like the TFSAs, RRSP savings, and investment accounts can hold ETFs, Bonds, Stocks, Cash, Precious Metals, GICs, and more.
Best Registered Retirement Savings Plans (RRSP) Savings Accounts In Canada
Tangerine RRSP Savings Account
With a promotional offer of 2.10% for the first five months, the Tangerine RRSP savings account comes with flexibility and zero monthly fees. The account has a regular interest rate of 0.10% and zero minimum balance.
Implicity Financial RRSP Savings Account
Implicity’s RRSP savings account offers a 1.35% interest rate. There is no minimum balance required to earn interest. Funds are readily available for withdrawal whenever you need it.
Motive Financial RRSP Savings Account
With a Motive Financial RRSP savings account, you can save for the long term while your funds are kept in movable formats. The account comes with a 0.25% interest for a $0 to $2500 account balance. Also, there’s a 1.25% interest rate on the balance of $2500.01 and above. It comes with no minimum contribution and tax-free earnings until withdrawal.
Achieva Financial RRSP Savings Account
Achieva’s RRSP savings account offers a 1.30% interest rate. It combines the high-interest rate and flexibility of regular savings accounts with all RRSP’s tax benefits. It comes with no minimum balance, and contributions can be made at any time throughout the year in small frequent deposits.
You can also earn up to a $100 referral bonus each year when you refer up to 4 new customers to the bank.
MAXA Financial RRSP Savings Account
MAXA’s RRSP savings account comes with a 1.30% interest with zero monthly maintenance fees and no minimum deposit required.
Motus Bank RRSP Savings Account
You can enjoy up to 1.00% on the Motus RRSP savings account. The account comes with zero monthly account fees.
Youth Savings Account
The youth savings account is designed to encourage the culture of saving among children. The account is restricted to Canadian citizens and residents of age 18 or younger.
Best Youth Savings Accounts in Canada
Tangerine Children’s Savings Account
Tangerine Children’s Savings Account ensures that your kids have the opportunity to learn about first-hand saving, as they get their own client number and login details to monitor the account. This account comes with a 0.20% standard interest rate. It also comes with no monthly fees and zero minimum balance.
Scotiabank Getting There Savings Program For Youth
With Scotiabank’s savings program, you can start building and inculcating healthy financial habits in youth children. The account comes with a 0.05% interest rate on deposits up to $499.99 and 0.10% interest on deposits of $500 or more. The youth savings plan has no monthly account fee as accountholders enjoy unlimited debit transactions.
CIBC Advantage for Youth
The Advantage Savings Account gives your child leverage on saving, with the benefits of an unlimited chequing account. This account cokes with a $25 welcome bonus upon account opening. Also, you can earn a regular interest of 0.05%. The account comes with no monthly fee and free unlimited transactions.
RBC Leo’s Young Savers Account
With the RBC’s Young Savers Account, you’ll get $25 upon account opening. This account is suitable for children of age 0-12 years. It comes with no minimum balance and free unlimited Interac e-Transfer transactions.
Canadian Western Bank Youth Account
Canadian Western Bank’s Youth Account is built for children age 18 and under. The account is equipped with smart financial tools and no monthly fees. You can earn 0.05% annual interest on the $0 to $500 account balance and 0.50% interest on an account balance of $500.01 and above.
TD Youth Account
The TD Youth Account is designed to help your children learn and appreciate the culture of saving. The account comes with zero monthly fee and unlimited free transactions.
Note: These rates are subject to periodic changes at the discretion of the issuing banks. The Youth savings account is designed for Canadian citizens and residents aged 18 or younger, except otherwise stated by the issuing bank.
How to Choose the Right Savings Account
Apart from the unique features and benefits, it is essential to look out for the terms and conditions before signing up for any savings account. Here’s a compilation of useful tips to aid your choice of a savings account with the best rates in Canada.
Compare Interest Rates
Before you settle for any savings account, check and confirm the percentage of interest on the account. Savings account yields interest on deposit balance. While some offer high interest, others pay less. Also, take note of the promotional offers and the regular rates that apply at the end of the offer.
There are many savings accounts with no monthly fees. Don’t just assume; check the monthly fees attributed to your preferred savings account.
Check for the fees charged on transactions, such as withdrawals, deposits, transfers, etc. a good number of savings accounts offer zero transaction fees.
Ensure that your preferred savings account is protected by the Canadian Deposit Insurance Corporation (CDIC) or other relevant agencies.
Savings and Financial Goals
Depending on your financial goals for saving money, it is preferable to choose a savings account that aligns with your reasons for keeping money aside.
Overall Best Savings Account Providers in Canada
- TD Bank savings account
- EQ Bank savings account
- RBC Royal Bank of Canada savings account
- Implicity Financial savings account
- Motive Financial savings account
- Tangerine savings account
- MAXA Financial savings account
- CIPB savings account
- Scotiabank savings account
- Bank of Montreal (BMO) savings account
- Oaken Financial savings account