Best High Interest Savings Accounts in Canada

Interest rates are at an all-time high in Canada, thanks to the Bank of Canada raising its benchmark rate several times to combat staggering inflation. While that means consumer debt and financing have become even more expensive, it also means savings accounts are offering attractive returns on your money now.

You can find savings accounts in Canada offering between 5% and 6% annual percentage yield on your savings. That is a big jump from the near 0% rates most savings accounts offered a few years ago.

But not every savings account at every bank or credit union in Canada is offering rates this competitive. You’ll typically find the best rates at online banks or financial institutions. But you’ll need to shop around to find the right account for your needs. To help, we’ve compiled a list of some of the top high-interest saving accounts in Canada.

Top high yield savings accounts in Canada

If you’re not earning a high interest rate on your savings, consider switching to one of these top high yield savings options in Canada.

Simplii Financial - Best overall high interest savings account

If you want to earn the maximum amount on your savings, you might consider opening an account at Simplii Financial. This online bank is currently promoting and offering 6% APY on your savings through April 30, 2024. Once you open a savings account, you’ll earn 6% for five months. After that, you’ll drop down to the bank’s lower high-yield savings account rate, which is currently between 0,40% and 5.50%, depending on your balance.

The high-yield savings account at Simplii Financial has no monthly fees, no transaction fees, and no minimum balance requirements (though your balance may dictate your interest earnings). It’s also fully insured by the Canadian Deposit Insurance Corporation for up to $100,000 per account.

Simplii Financial is also offering a cash-back offer to new customers right now. You can earn up to $150 when you open a cash-back Visa card with the bank on eligible purchases. That offer is running until February 29, 2024.

Owned by parent company CIBC, Simplii Financial offers a top-notch online chequing account as well and is currently offering a $400 opening account bonus when you open a new chequing account and receive at least $100 in direct deposits for three consecutive months.

This full-service online bank offers a variety of chequing and savings options, credit cards, loans, mortgages, and more.

Tangerine - High promotional interest rate account

Many top competitive online banks offer rates of 5% or slightly higher. Tangerine beats out the competitors with a high 6% annual percentage yield on your savings, but there’s a big catch. This 6% rate is only promotional and will likely expire sometime in March 2024. Once that happens, your rate could drop to as low as 0.70%.

We like that Tangerine does not charge a monthly fee for its savings account and that this account is easy to open and manage online.

However, some online customer reviews note that this promotional rate is not guaranteed. You may need to fulfill specific deposit requirements to earn this much.

Tangerine also offers a full suite of savings options, including guaranteed rate certificates (GICs), tax-free savings accounts, retirement savings plan savings accounts, US dollar savings accounts, and retirement income fund accounts.

KOHO - Best hybrid savings account

If you’re tired of only earning interest on your savings, you might be interested in a cohesive spending and savings account like KOHO’s hybrid option. You can earn up to 5% with a high-interest savings account from KOHO as soon as you opt-in.

This savings account also lets you earn up to 5% cash back on eligible purchases, comes with virtual credit card access that can help you building your credit profile, overdraft protection, and has no minimum balance requirements of non-sufficient funds (NSF) fees. It’s CDIC-insured, as well. KOHO is a virtual bank that lets you sign up in just a few minutes so you can start growing your money immediately. You also get free access to your credit score.

You can try this out for 30 days free. After that, your monthly fee is as low as $0 to $19, depending on your selected savings plan.

Scotiabank - Best account with helpful savings tools

Another competitive no-fee high yield savings account worth considering is at Scotiabank. This traditional bank offers a high interest savings account that lets you earn up to 5.60% APY for three months. This account has no monthly fees, no minimum balance requirement, and unlimited self-service transfers.

After three months, your savings rate will drop down to below 2% depending on your qualifications, so it’s worth determining if you’d rather earn a slightly lower rate for a longer period of time at a different bank.

We do like that Scotiabank’s high interest savings account offers online savings tools to help you separate funds for different savings goals. Its mobile app also makes it easy to manage your money on the go. This account is also CDIC insured.

CIBC - Best big bank option

If you prefer to bank with a trustworthy traditional bank, don’t overlook CIBC’s high interest savings option. While this bank’s rate starts low (up to 1.90%), you can earn up to 5.60% APY temporarily when you save at least $200 per month in a new account. You’ll earn this higher rate for the first four months on balances up to $1,000,000, after which it will drop down to the regular savings rate.

CIBC’s high-yield savings account has no monthly account fees, but does charge $5 for transactions like debit purchases. As a member of one of the country’s biggest banks, you’ll have access to 4,000 ATMs across Canada, but you’ll pay a transaction fee to withdraw your money from one.

We do like that CIBC will send you alerts if your account is short on funds before charging NSF fees or declines your payment. Like others on this list, this high-yield savings account is also CDIC insured.

Royal Bank of Canada - Another good high-yield option

The RBC high interest eSavings account earns up to 5.50% APY for three months when you open a new account. This current offer is valid through April 10, 2024. After that, the rate drops down to 3.8% APY (for balances under $1,000,000).

This high yield savings account has no monthly fees, free transfers between RBC accounts, and allows one free RBC ATM withdrawal per month. However, you will be charged $5 per transaction for any debit charges that exceed your monthly limit.

RBC also offers robust savings tools and digital services to help you better monitor your savings. The CDIC also insures this account.

What is a high interest savings account?

A high interest savings account — sometimes called a high yield savings account — is a deposit account that earns a competitive interest rate. Typically to be considered a high interest account, it must earn ten times as much interest as current savings account rates.

Right now, many traditional savings accounts at big banks in Canada are earning nearly 0% interest. But high interest savings accounts can help you earn 5% to 6% on your money. However, savings accounts offer variable interest, which means rates can rise and fall with the economy or based on bank preferences.

How does a high interest savings account work?

A high interest savings account works similarly to a regular bank account in Canada. When you open the account and deposit money, you’ll begin earning the bank’s interest rate. The main difference is that you can earn significantly more with a high interest savings account.

Many banks in Canada offer promotional rates for high interest savings accounts, which means you can earn a high rate for a limited period of time — typically three to five months. After that, your rate will drop down to the bank’s regular savings rate.

Not all banks follow this model, however. KOHO, for instance, doesn’t offer a promotional rate and instead lets you earn 5% APY on your savings.

Be sure you know how your interest is calculated, too. Banks that compound their interest more frequently (think daily or monthly) can help you earn more than those that compound less frequently (like annually).

Why are savings rates so high in Canada right now?

During the global COVID-19 pandemic, interest rates were close to zero. However, in later 2020 through 2021, inflation began rising due to demand increases in products and supply chain issues. When inflation rises, the Bank of Canada’s main action is raising its central fund rate.

This central fund rate is the overnight rate at which banks lend money to one another. When this rate rises, banks and credit unions generally follow in lockstep, increasing interest rates on consumer accounts like credit cards, loans, mortgages, and savings accounts.

The Bank of Canada has raised rates several times to help curb inflation, leaving interest rates at record highs. While this is bad news if you have debt or need financing, it’s good news for savers. Currently, high interest savings accounts are offering rates well over 5% APY.

How long will savings rates stay high?

There’s no way to know when rates will begin seeing significant drops, but it’s possible that the Bank of Canada may lower rates as soon as this year.

Many banks have already started quietly lowering savings rates. Most experts expect savings rates to have peaked and will not get any higher in the foreseeable future. This means earning as much as you can now while competitive rates can help you maximize your savings.

How to choose the right high interest savings account

To find the best Canadian high yield savings account for your money goals, you’ll want to compare offers from different financial institutions. Here are some factors you should keep in mind when shopping for your new high interest account:

• Interest rate. One of the primary factors to consider when opening a new high yield savings account is the interest rate the bank is offering. Pay attention to whether the rate is proportional or not. If it is, make sure you know the interest rate you’ll earn once the promotional period ends.

• Monthly fees. Some banks charge a monthly fee to maintain your account. Make sure you’re comfortable paying this fee before opening a new savings account, or shop around for no-fee savings options.

• Account fees. Your monthly fee isn’t the only charge you need to worry about. You may be charged non-sufficient funds fees, overdraft fees, transaction fees, annual fees, and other expenses to maintain your savings account. Weigh different fees before committing to a new savings account.

• Minimum balance requirements. Some banks require you to maintain a set balance in order to avoid fees or keep your account open. In some cases, your interest rate might also be determined by your savings balance. Be sure to read the fine print before opening a new savings account to ensure you can meet any minimum balance requirements easily.

• Insured by the CDIC. You want to make sure your money is protected in case of a bank failure. As long as the bank or credit union is insured by the Canadian Deposit Insurance Corporation, your funds will be safe for up to $100,000 per account type.

• Accessibility. Since most of the best high interest savings accounts are found at online banks, you’ll want to be sure you know how to withdraw or deposit your money. Some banks offer ATM access — just make sure you find out how much it costs to use these services. Others might offer in-person services as bank branches.

• Savings features. Building your savings can take time. That’s why many online banks offer savings tools to help you stay close to your savings goals. Some banks may allow you to save for multiple goals in one account, while others might offer educational tools to help you learn more about other savings options.

• Transaction limits. Although you may not be withdrawing from your savings account often, if you have debit card or bank card access, make sure you’re aware of any transaction limits. If you exceed these limits, you might encounter bank fees.