I’ve been writing about Canada’s best high interest savings accounts since I first started this blog back in 2007! Somewhat embarrassingly, I actually had a large portion of my savings sitting in cash at the time, so high interest accounts were my “investment” of choice. These days I prefer investment strategies such as Dividend Investing or All In One ETFs, but high interest savings accounts definitely have their place when it comes to saving for a new car, a vacation, or a downpayment on a house, especially as banks like EQ bank offer as much as 1.50% annual interest rate.
Compare Canada’s Best High Interest Savings Accounts
Enjoy a comparison of Canada’s leading online banks’ saving accounts. If you want to compare an online bank’s saving account to a Canadian big bank, you can find an additional comparison below.
|EQ Bank Savings Plus Account||Tangerine Savings Account||Scotiabank Momentum PLUS Savings Account (360-premium)||Motive Financial Savvy Savings Account
|Interest Rate||1.50%||0.15% (but with an initial 5 months teaser rate of 2.15%)||.55%-1.10% (tiered rate)||1.75%|
|Interac eTransfer Fees||Free||Free||Free||$1.00|
|Number of Free Monthly Transactions||Unlimited||Unlimited||Unlimited – but monthly account fee||2|
|Review||EQ Bank Review||Tangerine Bank Review||ScotiaBank Review||Motive Bank Review|
|Visit Website||Visit EQ Bank||Visit Tangerine||Visit Scotiabank||Visit Motive|
Canada’s Best Saving Accounts List by Interest rate
View our simple saving account interest rates comparison below.
- Motive Bank – 1.75% – Highest Interest Rate (…but mediocre online reviews)
- EQ Bank – 1.50% – Best Saving Account in Canada – Visit EQ Bank
- Outlook Financial (DGCM insured) – 1.50%
- Alterna Bank (CDIC insured) – 1.50%
- Oaken Financial (CDIC insured) – 1.50%
- Scotiabank Momentum PLUS Savings Account- 0.55%-1.10% (tiered rate)
- BMO Savings Builder – (CDIC insured) 0.50% (requires $200/month deposit)
- Simplii (CDIC insured) – 0.30% (formerly PC Financial)
- Canadian Big Banks ~ 0.20%
- Tangerine – 0.15% (but with a 2.15% teaser)
When looking at high interest savings accounts, you’ll notice very quickly that there are two different rates:
- The ‘teaser rate‘ (often granted for six monthly or less, to get your money in the door).
- The everyday rate
The reason these teaser rates are so popular is that the banks are betting that you’ll simply see the highest interest rate number, and go there. Even if you intend to switch over after your six months, it’s generally a good bet to assume that you’ll be too lazy to. This is why subscriptions and streaming services are so profitable!
So when you see an online bank such as Tangerine offer an eye-popping rate that is .5% higher than anything else out there – just understand that this is a temporary rate. There is nothing wrong with taking advantage of that rate – and we think Tangerine is a very solid banking option (read our full Tangerine review) – but just be aware.
The most notable thing to take from this list is that Canada’s major banks simply are not offering a competitive high interest savings account product at the moment. They are banking on the massive strength of their brands and the convenience of their retail banking locations to attract Canadians – not competitive interest rates.
Saving Account Reviews:
Other Criteria for Judging Canada’s Best High Interest Savings Accounts
While EQ is head and shoulders above the field when it comes to everyday high interest savings account rates, as well as GIC rates, that’s not the only criteria one should use when choosing a high interest bank account.
The good news is that all of the options listed above are “safe” in every sense a bank account can be safe. They all employ excellent security features and are guaranteed by solid insurance backing. The Manitoba-based credit union options are backed by the Deposit Guarantee Corporation of Manitoba (DGCM), whereas the larger online banking options (including EQ Bank) are backed by the Canadian Deposit Insurance Corporation. These insurance agreements mean that even if the banks were to go bankrupt, your money is insured and will get back to you. In the case of the DGCM there is no account limit, whereas for the CDIC there is a $100,000 limit per account. Some folks like to skirt this rule by having a high-interest account for themselves, their significant other, a TFSA account for each, a GIC for each, etc. All of these are considered separate accounts by the CDIC.
Long story short: They’re All Really Safe!
Some people want to keep much of their banking in one place (even though it’s quite fast and easy to shift money back and forth with online banking) and so being able to offer loans and/or mortgages, plus accessing a debit card becomes important.
Another comparison point is fees for services like eTransfers, foreign exchange currency transfers, overdraft fees, or fees for automated bill payments.
When it comes to our most recommended option of EQ Bank, they simply cannot be beat on the low fee and high interest rate side of things. They even launched a joint account option recently. However, they do not offer certain services such as a debit card at the time of this writing.
Check out our in-depth EQ Bank Review to see how we use Canadian banking hacks to maximize our credit card rewards points, our high interest savings account earnings, and the utility of a broader bank account in tandem with EQ.
Your Tax Free Savings Account (TFSA) Is Really a TFIA
A lot of folks seem to place an abnormally high value on being able to hold their high interest savings account within a TFSA or an RRSP.
This doesn’t make a ton of sense the vast majority of the time. If you’re looking at investing for the long-term, you should be building a bonds/stocks portfolio to shelter in your RRSP or TFSA. In fact, I’ve been saying for years that calling the fun financial tool a Tax Free Savings Account was a massive branding mistake on the part of the government. It should have been called a Tax Free Investment Account. Just that small name change – when combined with Canada’s collective financial illiteracy – has been enough to encourage broad misuse of the tax advantages.
About the only exceptions to this rule that I can think of off the top of my head, would be if you are relatively early in your savings journey, and are saving to buy a car or a housing down payment. In that early savings situation, if you have no long-term investment, and are clearly going to need the money in the next five years, then it makes sense to use your tax shelter for the relatively small returns generated by a high interest savings account.
We’ll Let EQ Bank Speak for Themselves
When it comes to consistently rewarding clients with the everyday best high interest savings account rate in Canada, EQ Bank simply stands head and shoulders above their competitors. Their low fees can’t be beat, as they pass their cost savings on to Canadians. If you want to play the teaser rate shifting game, you will likely be able to get a slight edge on the everyday EQ savings rate – but personally, I’ve only got so many hours in each day, and I do not need to spend them constantly opening new bank accounts and shifting money around.
Check out what EQ Bank had to say about their products and future projects when they were interviewed at the Canadian Financial Summit by MDJ’s own Kyle Prevost.