Types of Savings Accounts in Canada

There are a lot of ways to “save” in Canada, and they don’t all work the same.

Some are just safe places to park cash, others come with tax perks, and some are better for long-term goals like retirement or a home.

KOHO Essential Plan

Before getting into the formal account types, it helps to have a simple, flexible place to keep day-to-day savings and bill money.

KOHO Essential is designed to work like a no fee monthly account for most people because:

• It has a low monthly plan fee that can be waived when you set up direct deposit or add +$1,000.

• Grow your savings with a 2% interest savings rate on your entire balance.

• Earn 1% cash back on groceries, eating & drinking, and transportation.

• Enjoy unlimited transactions (never worry about sending money to someone again).

• No Minimum Balance Required.

1. Regular Savings Account

A regular savings account is usually:

• Easy to open at a bank or credit union

• Low risk, often with very modest interest

• Good for short-term goals and basic emergency funds

2. High Interest Savings Account (HISA)

A high interest savings account pays a better rate than a regular savings account, while still keeping your money:

• Safe (at a bank/credit union or via insured partners)

• Flexible and accessible

People use HISAs for:

• Emergency funds

• Short- to medium-term goals (travel, car, moving costs)

• Holding cash while deciding on next steps (investing, lump-sum payments, etc.)

3. Tax-Free Savings Account (TFSA)

A TFSA is a registered account with a big perk:

• Money inside a TFSA can grow tax-free, and

• Withdrawals are not taxed, regardless of gains

You get a limited contribution room each year, and unused room carries forward. You can hold:

• Cash

• GICs

• ETFs, mutual funds, and other investments (depending on the provider)

4. Registered Retirement Savings Plan (RRSP)

An RRSP is mainly for retirement, with different tax rules:

• Contributions are usually tax-deductible (can reduce taxable income)

• Investments grow tax-deferred

• Withdrawals are taxed as income later, when you take the money out

You can also use RRSPs for certain programs (like the Home Buyers’ Plan or Lifelong Learning Plan), subject to rules and repayment requirements.

RRSPs are often best for long-term, retirement-only money, not everyday savings.

5. First Home Savings Account (FHSA)

A First Home Savings Account is designed to help first-time buyers save a down payment:

• Contributions are generally tax-deductible

• Growth and qualifying withdrawals for a first home are tax-free

It combines elements of a TFSA and RRSP and is mainly for people actively planning to buy their first home.

6. Youth / Student Savings Accounts

Many banks offer youth or student savings accounts that come with:

• Lower or no monthly fees

• Sometimes slightly better interest

• Basic everyday banking features

They’re meant to help young people start saving and learn money habits without heavy fees.

7. USD or Foreign Currency Savings Accounts

If you earn or spend in another currency (like USD), some institutions offer foreign currency savings accounts:

• Let you hold money directly in that currency

• Can reduce conversion back and forth if you’re frequently using that currency

These are more niche, but useful for people who get paid in or regularly spend foreign currency.