Best High Interest Savings Account in Canada

The best high interest savings account in Canada should offer a competitive interest rate without making it difficult to access your money.

Look for low fees, no minimum balance and a rate that is not limited to a short promotional period.

KOHO High Interest Savings

It is a prepaid Mastercard, so you spend your own money while still earning high interest.

With KOHO High Interest Savings, you can:

• Grow your savings up to 3.5% interest

• Earn a 2% cash back rate on groceries, eating, drinking, and transportation and 0.5% cash back on everything else

• Unlimited transactions and free e-transfers

• No minimum balance required, ever

What Is a High Interest Savings Account?

A high interest savings account works like a regular savings account but pays a higher interest rate on your balance.

It can be useful for:

• Emergency savings

• A vacation

• A down payment

• Upcoming expenses

• Short-term financial goals

Your money remains accessible while continuing to earn interest.

What Should You Look for in a High Interest Savings Account?

Focus on a few important features:

• Competitive interest rate

• No or low monthly fees

• No minimum balance

• Free transfers

• Easy withdrawals

• No short-lived promotional rate

A high advertised rate is less useful if you need to maintain a large balance or pay frequent transaction fees.

Are Promotional Savings Rates Worth It?

They can be, but check what happens when the promotion ends.

Some savings accounts advertise a high introductory rate for a limited period. After that, the rate can fall substantially.

A lower non-promotional rate may be more useful if you plan to keep your savings in the account for longer.

Do You Pay Tax on High Interest Savings?

Usually, yes.

Interest earned in a regular savings account is generally taxable income in Canada. Your financial institution may issue a T5 showing the interest you earned.

If the savings are held inside an eligible TFSA, the interest can generally grow tax-free instead.

Is a High Interest Savings Account Good for an Emergency Fund?

Yes.

An emergency fund should usually be somewhere that is:

• Easy to access

• Low risk

• Separate from everyday spending

• Earning some interest

A high interest savings account can meet all four needs.

Avoid locking emergency savings somewhere that makes it difficult or expensive to access your money quickly.

What Is the Best High Interest Savings Account in Canada?

The best option depends on how you plan to use the account.

Prioritize a competitive rate, low fees, easy access and no unnecessary balance requirements.

For short-term savings, the most important thing is finding an account that lets your money earn interest without making it difficult to use when you need it.