Best Savings Accounts In Canada For November 2025

With an amazing interest rate, unlimited transactions, and cash back earning potential, the overall best savings account in Canada is KOHO Earn Interest. The best savings account from a credit union is the Meridian High Interest Savings Account, and the best option for kids is the Tangerine Children’s Savings Account.

Choosing the right savings account is a key step in smart banking, helping you maximize your interest earnings while keeping your money secure and accessible. The best savings accounts have high annual percentage yields (APYs). The higher the APY, the more your money will grow.

Key Takeaways

• The best savings account in Canada is KOHO Earn Interest.
• The main types of savings accounts include RRSP, TFSA, FHSA, HISA, hybrid, and tiered accounts.
• The best way to utilize a savings account is to regularly deposit a portion of your income and maintain a balance that earns interest, while ensuring it remains easily accessible for emergencies or short-term goals.

Best savings account interest rates

If earning interest is the most important thing to you, here are some of the top interest-earning accounts in Canada:

Keep in mind that some of these are tiered rates, so you'll need to meet balance requirements to earn that specific rate.

Plus, some of these banks also have promotional offers that give you a higher, temporary rate.

Overview of the best savings accounts for November 2025

Here's a look at the best Canadian savings accounts (and their highlights!).

How we picked our winners

To evaluate savings accounts, we analyze over 15 data points to generate our Genius Rating. We consider all aspects of a savings account, including fees, perks, interest rates, customer satisfaction, and promotions, to assess its overall value. Then, the account's features are rated based on how they stack up against other available options.

Best savings account 2025 winner: KOHO Earn Interest

KOHO Earn InterestCompare

Open an accountLearn more

Minimum Interest Rate

2%

Maximum Interest Rate

3.5%

Balance Required For Maximum Interest Rate

N/A

Overview Pros & Cons Product Features

Overview

4.4 Genius Rating

3.7 (21) User Reviews

Want a savings account that consistently has one of the best rates in Canada? You'll want to check out KOHO Earn Interest With The KOHO Prepaid Mastercard, which gets you up to 3.5% interest, depending on your subscription level.

Pros & Cons

Pros

• No transaction fees
• Earn 3.5% interest on every dollar
• Comes with a free cash back prepaid Mastercard
• Supports major digital wallets
• Free app for tracking spending and setting savings goals
• Automate your savings with RoundUps

Cons

• Monthly fees

Product Features

Provinces

ALL

Eligibility

• You must meet your province's age of majority

Why You Want It

Get 2 accounts in 1 with up to 3.5% interest + Cash back on every purchase.

Special Features

• Comes with a KOHO Prepaid Mastercard which you can upgrade for even more perks
• Earn up to 6.5% cash back on your spending
• Free app for setting saving goals and tracking spending
• Savings paid on a monthly basis
• KOHO International Money Transfer allows you to send money abroad to people in over 190 countries, right from your KOHO balance

# Of Free Transactions

Unlimited

# Of Free Interac E-Transfers

Unlimited

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

Our choice for the best savings account of 2025 is the KOHO Earn Interest account. It’s a unique account with a sky-high 3.5% interest rate, zero transaction fees, a free cash back prepaid Mastercard, and an intuitive app that allows purchase tracking and savings goals. Basically, the KOHO Earn Interest is the most perk-rich savings account on the market.

How much interest can you earn?: Up to 3.5%, with no balance requirement

Why we picked it: A hybrid account offers the best of both worlds; a high earn rate and rewards on spending. The account comes with a KOHO Prepaid Mastercard which has no transaction limits and earns up to 2% cash back.

Best basic savings account: Motive Savvy Savings Account

Motive Savvy Savings AccountCompare

Learn more

Minimum Interest Rate

0.5%

Maximum Interest Rate

2%

Balance Required For Maximum Interest Rate

N/A

Overview Pros & Cons Product Features

Overview

1.4 Genius Rating

2.5 (2) User Reviews

The Motive Savvy Savings Account is pretty basic as far as features go – but it makes up for it with its high interest rate and overall lack of fees. Currently at 2%, this is one of the best high interest savings accounts you can get right now in Canada.

Pros & Cons

Pros

• A high 2% interest rate
• Unlimited transactions and Interac e-Transfers

Cons

• Application requires a hard credit check
• Unavailable in Quebec

Product Features

Provinces

AB, BC, MB, NB, NL, NU, NT, NS, ON, PE, SK, YT

Eligibility

See Issuer for Details

Why You Want It

One of the best interest rates available at 2% + Free transactions.

Special Features

• Valuable high interest rate

# Of Free Transactions

Unlimited

# Of Free Interac E-Transfers

Unlimited

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

How much interest can you earn?: Between 0.5% and 2%

Why we picked it: This is likely one of the highest regular interest rates you'll find, with no minimum balance requirements or promotional restrictions to worry about at all. Plus, you have unlimited transactions and aren't charged fees for using unaffiliated ATMs.

Best tiered: Scotiabank Momentum^PLUS Savings Account

Scotiabank Momentum^PLUS Savings AccountCompare

Open an accountLearn more

Minimum Interest Rate

0.4%

Maximum Interest Rate

0.85%

Balance Required For Maximum Interest Rate

N/A

Overview Pros & Cons Product Features

Overview

4.1 Genius Rating

3.7 (22) User Reviews

With one of the highest savings rates you can get from a big bank account, the Scotiabank MomentumPLUS Savings Account packs some serious punch for your money. Right now, you could get up to 4.75%^* interest for the first 3 months on your savings.

Pros & Cons

Pros

• Savings goals with bonus interest rates
• Multiple savings goals, one account
• Bonus interest rates
• No monthly fees
• Unlimited free self-service transfers
• No minimum balance

Cons

• Money is locked in if you want the bonus interest rate
• No free Interac e-Transfers
• No free debit transactions

Product Features

Provinces

ALL

Eligibility

See Issuer for Details

Why You Want It

Get up to 4.75%^* interest on your money + No monthly fees.

Special Features

• Save for multiple goals at once
• Tiered Premium Period interest rates
• Unlimited tree transfers between Scotiabank accounts

# Of Free Transactions

0

# Of Free Interac E-Transfers

0

Max Promotion Rate

4.75%

Welcome Bonus Value

N/A

Promo End Date

See Issuer for Details

 

How much interest can you earn?: Between 0.4% and 5.6%

Why we picked it: This is a tiered savings account, with different interest rates for different account balances. Clients set savings goals with spans of 90, 180, 270, or 360 days and are rewarded with up to 0.75% in interest if they meet those goals and don't make withdrawals.

Best unlimited transactions: EQ Bank Personal Account

EQ Bank Personal AccountCompare

Open an accountLearn more

Minimum Interest Rate

1%

Maximum Interest Rate

2.75%

Balance Required For Maximum Interest Rate

$0

Overview Pros & Cons Product Features

Overview

5.0 Genius Rating

4.0 (6) User Reviews

If you’re looking for a simple place to stash some extra cash and earn a higher-than-average interest rate, EQ Bank Personal Account may be exactly what you’re looking for. It does have a few other features, including the ability to easily send International Money Transfers, but otherwise it’s mostly geared to earning you interest.

Pros & Cons

Pros

• High daily interest rate
• Easy access to all other EQ Bank products
• Less expensive international money transfers
• Zero everyday banking fees
• Free Interac e-Transfers, electronic funds transfers, and bill payments
• No minimum balance

Cons

• No welcome bonus

Product Features

Provinces

ALL

Eligibility

• Age of majority
• Canadian citizen

Why You Want It

One of the highest interest rates at 2.75%* + Free Interac e-Transfers.

Special Features

• Very high interest rate
• Includes a prepaid cash back Mastercard
• No ATM fees, plus reimbursement for any independent fees

# Of Free Transactions

Unlimited

# Of Free Interac E-Transfers

Unlimited

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

How much interest can you earn?: Between 1% and 2.75%

Why we picked it: This account provides a unique combination of unlimited transactions and a high interest rate. There aren't any monthly fees for holding this account either, saving you even more money.

Best promotional rate: Tangerine Savings Account

Tangerine Savings AccountCompare

Open an accountLearn more

Minimum Interest Rate

N/A

Maximum Interest Rate

0.3%

Balance Required For Maximum Interest Rate

$0

Overview Pros & Cons Product Features

Overview

4.0 Genius Rating

3.0 (1) User Reviews

The Tangerine Savings Account starts you out with a bang - 4.5% for the first 5 months. And if you happen to have a Tangerine Mastercard, you'll unlock a 3rd bonus category simply by getting your cash back deposited in your Tangerine Savings Account.

Pros & Cons

Pros

• Excellent promotional interest rate
• No fees or service charges
• No minimum balance required
• Automatic savings program

Cons

• Not the highest available interest rate
• Getting money out of the account can be inconvenient

Product Features

Provinces

ALL

Eligibility

• Age of majority
• Canadian citizen

Why You Want It

Start out strong with 4.5% interest + No minimum balance.

Special Features

• Excellent promo interest rate
• Automatic Savings Plans

# Of Free Transactions

0

# Of Free Interac E-Transfers

0

Max Promotion Rate

4.5%

Welcome Bonus Value

N/A

Promo End Date

October 31, 2025

 

How much interest can you earn?: A 4.5% promo rate for 5 months, followed by a rather unexceptional regular rate of 0.3%.

Why we picked it: Tangerine pushes out the competition (namely the Simplii High Interest Savings Account) by just 0.06%, but every penny counts. This account has no monthly fees, no minimum balance requirements, and access to Scotiabank's extensive network of 3,600+ ATMs.

Best regular rate: Neo Savings Account

Neo Savings AccountCompare

Open an accountLearn more

Minimum Interest Rate

2.25%

Maximum Interest Rate

2.9%

Balance Required For Maximum Interest Rate

$20,000

Overview Pros & Cons Product Features

Overview

3.8 Genius Rating

4.1 (9) User Reviews

With a high 2.9% interest rate on every dollar in the account (one of the highest rates in Canada), you can make sure your money is working as hard as you are. And it's completely stress free with no minimum balances or account fees to worry about, plus you can transfer money to your other Neo accounts for free.

Pros & Cons

Pros

• Impressive 2.9% interest rate
• No monthly fees or minimum deposit requirements
• Personalized goal-tracking tool
• Open up to 10 accounts at once
• Customizable account name and icons

Cons

• Hard to access your money
• No welcome bonus offered

Product Features

Provinces

ALL

Eligibility

See Issuer for Details

Why You Want It

Earn one of the best rates in Canada (2.9%) + No monthly fees.

Special Features

• No monthly fees or minimum deposit required
• Personalized saving goals to keep you organized and on-track
• Track your goals in real-time

# Of Free Transactions

N/A

# Of Free Interac E-Transfers

N/A

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

How much interest can you earn?: A flat 2.9%

Why we picked it: Neo Financial is one of the best online-only banking institutions in the country, and its high interest account offers an excellent interest rate that never wavers. It's easy to connect it to a Neo Everyday Account too, where you can enjoy the freedom of unlimited transactions.

Best kids' account: Tangerine Children’s Savings Account

Tangerine Children’s Savings AccountCompare

Learn more

Minimum Interest Rate

N/A

Maximum Interest Rate

0.4%

Balance Required For Maximum Interest Rate

N/A

Overview Pros & Cons Product Features

Overview

4.1 Genius Rating

0.0 (0) User Reviews

The Tangerine Children’s Savings Account is a no-fee kid’s bank account designed to help parents and guardians encourage the habit of saving early in life. It offers a modest 0.4% interest rate, the ability to set up automatic savings plans, and a separate login for kids to manage their account online.

Pros & Cons

Pros

• No monthly or service fees
• The child gets their own client number and login
• Earn 0.4% interest

Cons

• No welcome bonus
• There are other youth accounts with more perks
• Only for children 11 years old and younger

Product Features

Provinces

ALL

Eligibility

• 11 years old or younger
• Must open an adult savings account
• Canadian citizen

Why You Want It

Earn 0.4% interest + Your child gets their own client number and login.

Special Features

• Unique client number and login
• Competitive interest rate (for youth accounts)

# Of Free Transactions

0

# Of Free Interac E-Transfers

N/A

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

How much interest can you earn?: 0.4%

Why we picked it: This account offers more interest than the majority of children's accounts in Canada – and has all the benefits of an online bank. Kids get their own client number and login, allowing them to build the foundation of financial knowledge and confidence.

Best credit union account: Meridian High Interest Savings Account

Meridian High Interest Savings AccountCompare

Learn more

Minimum Interest Rate

N/A

Maximum Interest Rate

0.85%

Balance Required For Maximum Interest Rate

N/A

Overview Pros & Cons Product Features

Overview

3.9 Genius Rating

0.0 (0) User Reviews

There are many high interest savings accounts to consider, including the Meridian High Interest Savings Account. It offers a competitive interest rate of 0.85% and unlimited transactions for no monthly fee. This is a good choice for anyone wanting to earn a little extra on their savings and maintain access to their funds at any time.

Pros & Cons

Pros

• Get a 0.85% interest rate
• Unlimited transactions
• Access to thousands of ATMs in North America
• Open registered accounts

Cons

• Branches only in Ontario
• Lower interest rate than some high interest savings accounts
• No welcome bonus or special offers

Product Features

Provinces

ALL

Eligibility

• Live or work in Canada
• Age of majority in your province or territory
• Valid email address
• SIN for tax purposes
• Access to your mobile phone

Why You Want It

Earn 0.85% interest + Unlimited free transactions.

Special Features

• Available for TFSA, RRSP, FHSA, and RRIF
• Community-minded banking experience

# Of Free Transactions

Unlimited

# Of Free Interac E-Transfers

0

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

How much interest can you earn?: 0.85%

Why we picked it: Meridian is one of the best credit unions in the country, and its savings account is one of its top products. It boasts a competitive interest rate, comes with unlimited transactions and provides access to more than 2,600 ATMs via THE EXCHANGE Network.

Best RRSP: Desjardins RRSP

Desjardins RRSPCompare

Learn more

RRSP GICs Available?

RRSP Mutual Funds?

See Issuer for Details

RRSP Portfolios?

RRSP Savings Account?

Overview Pros & Cons Product Features

Overview

5.0 Genius Rating

1.0 (1) User Reviews

A Desjardins RRSP can be a smart choice for Desjardins clients trying to plan for their future. As with all Registered Retirement Savings Plans (RRSPs), this account offers a tax-free home for any retirement savings, with room and opportunity to add several types of investments – as long as it stays within the government-set annual contribution limits.

Pros & Cons

Pros

• Tax sheltered and tax deductible
• Easy and quick online setup process
• Ability to convert BONUSDOLLARS into RRSP investments

Cons

• Withdrawal creates a tax penalty
• Limited nation-wide presence for Dejardins

Product Features

Provinces

ALL

Eligibility

• Age of majority
• Canadian resident
• Under 71 years old
• Be a current Desjarins client

Why You Want It

Convert BONUSDOLLARS into RRSP investments + Get flexible options.

Special Features

• Contribute to your RRSP with BONUSDOLLARS

Self-directed RRSP Platform

Desjardins Online Brokerage

Self Directed Base Fee (Dollar)

$0

Self Directed Base Fee (Percentage)

N/A

RRSP GICs List

• Market-linked
• Non-Cashable
• Cashable
• US Dollar

Self-directed Available?

RRSP GICs Available?

RRSP Mutual Funds?

See Issuer for Details

RRSP Portfolios?

RRSP Savings Account?

Min RRSP Savings Account Interest Rate

0.65%

Max RRSP Savings Account Interest Rate

0.65%

Promotion

N/A

Promotion End Date

N/A

Average Mutual Fund MER

N/A

Investment Portfolios Fees

See Issuer for Details

 

How much interest can you earn?: Up to 4.5%

Why we picked it: If you have a Desjardins credit card and earn BONUSDOLLARS, you can redeem these as RRSP contributions – a valuable convenience that we haven't seen with any other RRSP provider. There's a wide range of investment options available, and you won't pay a monthly usage fee to manage your RRSP via Desjardins Online Brokerage.

Best U.S. dollar account: EQ Bank US Dollar Account

EQ Bank US Dollar AccountCompare

Learn more

Minimum Interest Rate

2.5%

Maximum Interest Rate

2.5%

Balance Required For Maximum Interest Rate

N/A

Overview Pros & Cons Product Features

Overview

3.4 Genius Rating

0.0 (0) User Reviews

The EQ Bank US Dollar Account is one of the best U.S. bank accounts available in Canada, offering a higher interest rate than most similar accounts, as well as many other valuable money-saving features. EQ makes it easy to move your U.S. funds around, but it doesn't offer unlimited transactions, which would be a nice added touch.

Pros & Cons

Pros

• High interest rate on USD balance
• Competitive USD exchange rate
• Free EFT between linked accounts
• Send international transfers

Cons

• Not available in Quebec for now
• No physical locations
• No direct withdrawals or deposits

Product Features

Provinces

AB, BC, MB, NB, NL, NU, NT, NS, ON, PE, SK, YT

Eligibility

• Canadian citizen
• Age of majority in your province
• Need a social insurance number
• Need a Canadian phone number
• Need an EQ Bank Personal Account

Why You Want It

Earn 2.5% interest + Send international money transfers using Wise.

Special Features

• Send money abroad with Wise
• Free, unlimited USD to USD transfers within Canada
• Very reasonable exchange rates

# Of Free Transactions

0

# Of Free Interac E-Transfers

0

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

How much interest can you earn?: A flat 2.5% rate

Why we picked it: EQ Bank is also known for consistently having some of the best exchange rates available. At the time of writing, it values 1 Canadian dollar at 0.6987 U.S. dollars, which is higher than many other exchange services. Plus, you'll be hard-pressed to find a U.S. dollar chequing account with a higher interest rate higher than 2.5%.

Best TFSA: Scotiabank TFSA

Scotiabank TFSACompare

Open an accountLearn more

Average MER

See Issuer for Details

TFSA GICs Available?

TFSA Mutual Funds?

TFSA Savings Account?

Overview Pros & Cons Product Features

Overview

5.0 Genius Rating

0.0 (0) User Reviews

A Scotiabank TFSA is an easy way to take advantage of tax-free savings while investing with a trustworthy big bank. You’ll get a variety of options, including GICs (4 different types, in fact), mutual funds, portfolios, and cash savings accounts. You can also invest in stocks and bonds in your self-directed TFSA through Scotia iTrade.

Pros & Cons

Pros

• Lots of investing options
• 4 different types of GICs

Cons

• Lackluster return on TFSA savings account
• No special features and not much detail on the website

Product Features

Provinces

ALL

Eligibility

• Age of majority
• Canadian citizen

Why You Want It

Grow your money tax free + Get plenty of flexibility for your investments.

Special Features

See Issuer for Details

Self-directed TFSA Platform

Scotia iTrade

Self-directed Base Fee

N/A

TFSA GICs List

• Cashable
• Non-cashable
• Market linked
• Personal redeemable

Self-directed Available?

TFSA GICs Available?

TFSA Mutual Funds?

TFSA Portfolios?

TFSA Savings Account?

Min TFSA Savings Account Interest Rate

0.25%

Max TFSA Savings Account Interest Rate

0.25%

Promotion

N/A

Promotion End Date

N/A

Average Mutual Fund MER

See Issuer for Details

Investment Portfolios Fees

N/A

 

Grow your money tax free + Get plenty of flexibility for your investments.

How much interest can you earn?: 0.01%

Why we picked it: Scotiabank is one of the oldest and most well-established financial institutions in the country, offering TFSA holders a variety of investment options. One especially attractive option is the Scotiabank Savings Accelerator Account, which earns you 0.25% interest on any uninvested cash sitting in the account.

Best FHSA: EQ Bank FHSA Savings Account

EQ Bank FHSA Savings AccountCompare

Open an accountLearn more

Self-Directed Available

GICs Available

Mutual Funds Available

Savings Account Available

Overview Pros & Cons Product Features

Overview

2.6 Genius Rating

0.0 (0) User Reviews

First Home Savings Accounts (FHSAs) promise to make saving for your first home easier by letting you put away up to $40,000 tax free. And EQ Bank FHSA Savings Account promises to help you get there faster by letting you earn up to 1.5% interest on your balance. This stable interest rate is ideal for home buyers who are thinking in the short term.

Pros & Cons

Pros

• Earn 1.5% tax free interest on your balance
• Next-to-no risk investment
• High-rate EQ Bank FHSA GICs also available

Cons

• Not available in Quebec
• No welcome offer
• You can’t hold any other investments besides GICs

Product Features

Provinces

AB, BC, MB, NB, NL, NU, NT, NS, ON, PE, SK, YT

Eligibility

• First-time home buyer
• Canadian resident (not in Quebec)
• 18 years or older

Why You Want It

Easily earn 1.5% on your first home savings + Benefit from tax deductions and tax-free growth.

Special Features

See Issuer for Details

Self-Directed Available

Self-Directed Platform

N/A

Self-Directed Base Fee

N/A

GICs Available

Types of GICs

• Non-Cashable

Mutual Funds Available

Average Mutual Fund MER

N/A

Investment PortfoliosAvailable

Investment Portfolio Fees

N/A

Savings Account Available

Minimum Savings Account Rate

1.5%

Maximum Savings Account Rate

1.5%

Promotion

N/A

Promotion End Date

N/A

 

How much interest can you earn?: A flat 1.5% rate

Why we picked it: EQ Bank was one of the first institutions to offer a first home savings account (FHSA). Between the interest rate and the fact that they also offer high-rate FHSA GICs (your investment is re-deposited into your FHSA upon maturity), it's clear that EQ Bank is a great option for aspiring homeowners.

Best savings account according to Reddit: Wealthsimple Chequing

Wealthsimple ChequingCompare

Learn more

Minimum Interest Rate

1.75%

Maximum Interest Rate

2.75%

Balance Required For Maximum Interest Rate

$500,000

Overview Pros & Cons Product Features

Overview

4.0 Genius Rating

0.0 (0) User Reviews

Wealthsimple has a high interest spending account known as the Wealthsimple Chequing account. It’s actually a hybrid account that gives you fairly easy access to your money for no monthly fees. With an interest rate of 2.75%, unlimited e-Transfers, no FX fees, and 1% back on your purchases when you use your Wealthsimple Card, this account is worth taking a look at – especially for investors.

Pros & Cons

Pros

• Impressively high standard interest rate
• Free and unlimited Interac e-Transfers
• No monthly fees, and no transaction fees
• Earn 1% back in cash, stocks, or crypto with the Wealthsimple card
• Get paid early with direct deposits
• Free from foreign transaction fees

Cons

• High minimum balance to reach maximum interest rate

Product Features

Provinces

ALL

Eligibility

See Issuer for Details

Why You Want It

Earn up to 2.75% interest + Get 1% back in cash, stock, or crypto on your purchases.

Special Features

• Get 1% back in cash, stock, or crypto with the Wealthsimple card
• Up to $1 million in CDIC coverage

# Of Free Transactions

Unlimited

# Of Free Interac E-Transfers

Unlimited

Max Promotion Rate

N/A

Welcome Bonus Value

N/A

Promo End Date

N/A

 

How much interest can you earn?: Up to 2.75%

Why we picked it: While its interest rates aren’t quite that high (there are higher rates available), Wealthsimple Chequing is still a solid choice. Wealthsimple also offers easy-to-use investment accounts, including FHSAs, TFSAs, RRSPs, and other options – it’s a very convenient platform if you want to keep multiple streams of investments all in one place.

These Redditors point out a few of this account's impressive features:

What is a savings account?

A savings account is a type of bank account that accrues interest on the balance – a place to securely store money and watch it grow slowly, but reliably. There is a set interest rate (or tiered set of rates) that determines how much your savings will grow, as well as limited-time promotions that boost interest.

Did you know? The interest rate on your bank account directly correlates with the Bank of Canada and the prime rate. Aka, the higher the prime rate, the higher your interest rate.

Pros and cons of savings accounts

Here's an overview of the important pros and cons to consider about savings accounts:

Types of savings accounts

If you read through our rankings, we chose 6 savings accounts in 6 different categories. Here is a guide to understanding each category.

High interest savings accounts (HISA)

High interest savings accounts generally offer higher interest when compared to "regular" savings accounts. They’re typically offered by online banks which have less overhead costs so they're able to pass those savings onto their customers. Often, they will have lower minimum deposits and fees.

Hybrid

Hybrid accounts earn interest on your balance and purchases made on the account’s prepaid card. No matter what you do, you'll come out ahead.

Tiered

Tiered savings accounts function similarly to traditional ones but there are tiers based on how much money you have in the account. The more you save, the higher your interest rates you'll earn on your balance. You can also see tiers offered depending on how long you keep the money in your account.

Registered retirement savings plan (RRSP)

RRSP stands for registered retirement savings plan and, as the name suggests, is all about saving for retirement. As you work and add money to the account, you won't be taxed and can even deduct your deposits on your tax return.

Tax-free savings account (TFSA)

These savings accounts are excellent for investments as you won't pay taxes on the interest earned. You can deposit money into a tax-free savings account and invest it in things like GICs, stocks, bonds, and more.

First home savings account (FHSA)

This is another specialty savings account for first-time homebuyers. An FHSA is considered by some banks to be a savings account, allowing you to take advantage of interest. The amount you deposit is tax deductible and grows tax free within the account.

When to use a savings account

A savings account is a specific type of bank account that people use when they want to store funds they don't need regular access to.

Here are a few examples of why people choose to set money aside in a savings account:

• Create an emergency fund
• Save for a down payment on a house, car, or other big purchase
• Plan and fund their retirement
• Prepare for upcoming home repairs or renovations
• Save for post-secondary education
• Save for travel and other experiences
• Increase their financial independence

How to choose the best savings account for you

As listed above, there are quite a few different types of savings accounts available, and the one that's right for you will depend on your purpose for saving.

Just as you wouldn't use a high interest savings account if you want to make regular purchases, you wouldn't use a tiered account if you're making small and infrequent deposits for a short-term goal.

Using the examples in the previous section, here are the best account types for each situation:

How to open a savings account

Here are the steps required when you open a new savings account:

• Research and choose: Take time to browse through your account options and find the one that best suits your needs.
• Gather documents: You'll need to have some ID and personal documentation handy, like your passport, driver's license, SIN, etc. Your new bank may request some kind of proof of address, too, like a piece of mail or another bank statement.
• Submit your application: This can be done in person at a bank branch, over the phone, or online via the bank's website.
• Fund your account: There are a few ways to deposit funds into your new account, including transferring funds from another account, using an ATM, or visiting a branch location and having a teller assist you.

Are savings accounts taxable in Canada?

Aside from TFSAs, account holders are typically required to pay income tax on the interest earned within a savings account. Your institution will send you a document that outlines the investment income you earned (called a T5 form), and you must include this information when filing your tax return.

As the name suggests, you don't have to pay taxes on interest earned within a tax free savings account. Your contributions aren't tax-deductible either.

Savings account fees and features to look out for

There are many bank fees and sneaky features that can cost you money if you're not careful. Keep an eye out for these in particular:

• Foreign transaction fees: This is a percentage charged when you convert currency, make an international transfer, or make a purchase in a foreign currency. Fees can be as high as 2.5%
• Membership fees: Usually charged by credit unions, a membership fee may be an annual fee or a one-time payment for new members. It may be as low as $5 or as high as $25.
• Transaction overage fees: You'll be charged a fee if you use more than the allotted transactions per month. This ranges from $1 to $5 per transaction.
• Low regular interest rate after promo: Promo rates can be as high as 4.5% and then drop to well below 1%.
• Minimum balance requirement: Especially if your account has tiered interest rates, not having the right balance can mean you miss out on significant interest. It's rare, but some savings accounts charge monthly fees for accounts under a certain balance (similar to chequing accounts).
• Dormancy penalties: Accounts are considered dormant after 12 or 24 months of inactivity, with fees ranging from $20 to $60. The account may be closed after 10 years of dormancy.

Alternatives to savings accounts

Here are a few alternatives to consider if you want to use and grow your money differently:

• Chequing account: For your spending money, lower interest rates but some perks
• GICs: For getting higher interest rates in exchange for locking away your money
• ETFs: For the highest returns and more flexible withdrawals
• Bonds: For high yields and to diversify your investment portfolio

If interest rates are a determining factor for you, here’s how each alternative stacks up:

• Chequing account: 0% to 0.1% for most accounts
• GICs: Up to 3.95%
• ETFs: Up to 18.15% (Average annual return since inception)
• Bonds: Varies by type of bond

Here are some example scenarios of different starting investments, timelines, and recommended matches:

$1,000 Investment with a 2-Year Timeline: GICs

Why? GICs offer a guaranteed return, which is typically higher than other low-risk options like a high-interest savings account (HISA) or chequing account. With a 2-year timeline, a GIC is a solid choice for earning a good return with minimal risk – as long as you won’t need that money as liquid cash before the 2 years are up.

$5,000 Investment with a 5-Year Timeline: ETFs

Why? Over a 5-year period, ETFs can provide higher returns compared to GICs, bonds, or HISAs. They offer the potential for significant growth, though they come with higher risk. For a longer timeline, the growth potential of ETFs usually outweighs the stability of other options. You can sell your ETFs at any time if you need the cash, although rates can fluctuate and there may be fees.

$2,500 Investment with a 2-Year Timeline: HISA

Why? If you might need access to your funds within the next two years, a HISA is the safest option. While it offers lower returns compared to other investments, it provides liquidity and easy access to your money in case of emergency. If you’re investing for the long-term, however, and you don’t need that cash anytime soon, consider a GIC – or look into GIC laddering.

Who should consider a U.S. savings account?

Frequent U.S. travellers: People who visit the U.S. often may benefit from having a U.S. savings account to hold their currency and avoid frequent exchanges.

People with U.S. bills: If you have bills to pay in U.S. dollars, then a U.S. savings account could make sense for you. This may also be helpful if you get paid in U.S. dollars.

Diversify your currency holdings: If you want to mitigate the risks that come with holding all your investments in one currency, a U.S. savings account can help. It may also open up other investment opportunities.