Top High-Interest Savings Accounts in Canada – Canadian Kilometers

As my travel budget has expanded with no current bookings, I have been exploring better ways to store my funds. For money that you prefer to keep accessible, a high-interest savings account is a solid choice. Major banks typically offer low interest rates on savings accounts (often 0.2% or less) alongside monthly fees. Hence, digital banking may be your best option. Three main institutions currently provide the best offers. I personally hold accounts with these banks, so I can confidently share my recommendations: Tangerine Savings Account, EQ Savings Plus Account, and B2B Bank HISA, which currently offers up to a 2.8% interest rate.

An interest rate of 2.8% represents a significant improvement over typical returns most consumers receive from savings accounts. For instance, if you store $100,000 in such an account, you could earn $2,800 in (taxable) interest. In contrast, with a 0.3% account, you’d only receive $300 — that’s a difference of $2,500! Given that an international premium class award ticket usually incurs $100-$250 in taxes and fees, those savings can lead to multiple flights! Although the recent cuts to the overnight rate target by the Bank of Canada are unfortunate and have resulted in lower rates overall, there remain opportunities to achieve impressive returns based on the accounts you choose.

Guaranteed Investment Certificates (GICs) are frequently recommended for holding funds, but I do not utilize them. Usually, I can earn better returns by switching between various bank account products, all while keeping my money completely liquid. For example, some GICs are offering around 2% interest for a one-year term — that is a long time for your funds to be locked away. Opening a new bank account often requires minimal effort, typically with no hard inquiries. A hard inquiry negatively impacts your credit report, while new credit card applications almost invariably trigger a hard pull. For more information, check out articles discussing how your credit score is calculated and which credit bureaus are checked for a new credit card application.

Additional Reading: Free Credit Score Options for Canadians

Please note that I am not a financial advisor. The opinions expressed here are solely my own. For financial advice, please consult a professional.

Tangerine High Interest Savings Accounts

• Promotional Interest Rate: Up to 2.80%

The Tangerine Savings Account currently boasts the highest promotional rate available among all Canadian financial institutions (except for private offers). As of now, they are offering 2.8% interest for the first five months to new clients who open a new account. Owned by Scotiabank, Tangerine is unique in this article for offering a USD savings account and some physical locations.

Tangerine High Interest Savings Account – New Client Offer

Tangerine accounts are simple to open, featuring a user-friendly online interface. There are no hard inquiries involved when applying for a checking or savings product, provided you decline overdraft. Checking accounts are a topic for another time, but Tangerine provides an additional $50 cash bonus for new clients who open a checking account using the promotion code / Orange Key 44369391S1. To qualify for this bonus, customers must deposit $250 within the first sixty days of opening the account and fulfill other requirements.

Although existing customers do not receive these promotional offers, Tangerine continues to be one of the top high-interest savings account options due to their excellent targeted promotions, which provide comparable rates. They currently have a targeted offer of 2.8% applicable to Tax-Free Savings Accounts (!) and USD accounts. Depending on your income tax rate, this could lead to significant savings.

These promotions typically last for several months. The clients targeted may have lower funds in their savings accounts, as the offers are based on any marginal deposits made during the promotional period. Tangerine captures a ‘snapshot’ of your current account balance on a specific date. If your balance drops below that amount, the bonus interest rate no longer applies. I often receive targeted promotions when I transfer my funds to other institutions after the promotional period ends.

Application Link: Tangerine Savings Account

EQ Bank High Interest Savings Accounts

EQ Bank HISA

EQ Bank is another excellent option offering favorable rates for savings accounts. They are a subsidiary of Equitable Bank, primarily known for commercial and residential real estate financing. The current annual rate for the EQ Bank Savings Account stands at 2.00%. This interest is calculated daily and paid out monthly, with a deposit limit of $200,000. EQ Bank acts as the digital branch of the bank, launched in 2016, and initially offered a 3.00% interest rate. Although rates have decreased since then, the current rate remains significantly higher than the Bank of Canada’s overnight target.

Another unique feature of this account is the capacity to send funds internationally at one of the lowest rates available. EQ Bank collaborates with TransferWise, an online money transfer service, offering your first transfer with potentially no fees. TransferWise reduces fees by matching transfers between parties to avoid the typical buy/sell costs of currency conversion. Thus, the EQ Bank savings account is one of the best options if you are looking to send international remittances.

TransferWise

A notable convenience of EQ Bank is the ability to link multiple online accounts. This feature simplifies the process of transferring funds to and from any other bank account you own. EQ Bank allows you to link five or more bank accounts for easy transactions, which greatly enhances usability. There is no minimum balance requirement for this account. Interac e-Transfers are free, and most transactions through the account incur no banking fees.

Application Link: EQ Bank Savings Plus Account

B2B Bank High Interest Savings Accounts

B2B HISA

B2B Bank is a subsidiary of Laurentian Bank, a mid-sized institution with about $45 billion in assets. They have primarily focused on digital banking solutions. Originally, this product was among the best-kept secrets, starting with a remarkable 3.2% interest rate. The B2B High Interest Savings Account now offers an annual interest rate of 2.25%, applicable to balances up to $500,000.

Recently, access to this product has been restricted to consumers with a referral code from an advisor. Alternatively, consumers can open an account with LBC Digital Banking, which offers the same features as B2B Bank but is tailored for personal use. Indeed, the name B2B suggests a business-to-business focus, while LBC Digital caters to individual customers under the Laurentian Bank brand.

I currently do not hold an LBC account; however, I opened a B2B account while public sign-ups were still available. I find these accounts are generally a satisfactory option for achieving a decent interest rate on savings. The application process was somewhat complicated and cumbersome, particularly when identity verification with Equifax failed. My overall experience with their digital platform faced several glitches, such as broken links to bank accounts and limited customization options.

It’s important to note that this account does not integrate with financial and budgeting services like Mint (by Intuit). Nonetheless, I consider this product as a backup to my Tangerine and EQ Bank accounts. The initial 3.2% rate was indeed attractive.

Application Link: LBC Digital Bank High Interest Savings Account

Savings Account Benefits

One of the key advantages of all these accounts is their low fee structure. There are no minimum amounts required to open the accounts. The entire process is online, with access exclusively through digital channels. There are no required monthly minimum balances, nor is there a mandatory activity level to avoid fees, and you can transfer funds between accounts without any charges.

Interac e-Transfers are also free, subject to certain monthly limits for some accounts. Personally, I appreciate the ease of moving money between traditional and online accounts. These options facilitate simple fund transfers between your various accounts, a convenience that traditional banks like Scotiabank or BMO do not readily provide. Even among credit unions, the easiest method of moving funds often involves checks, which can be cumbersome due to holds on large amounts.

Credit: CDIC

All the products mentioned here benefit from the same CDIC deposit insurance as any other Schedule I and II banks. The Canadian Deposit Insurance Corporation guarantees protection for up to $100,000 per account. If you open multiple accounts, your funds remain protected under the same guidelines.

If you haven’t paid much attention to your savings accounts lately, I highly recommend considering one of these banking options. Funds in the Big 5 banks rarely earn any interest for the average consumer. Explore these possibilities and determine what best suits your needs.