High-interest savings account

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Toronto-Dominion Bank
TD Every Day Savings Account
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$0 monthly fee
Tangerine Bank
Savings Account
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$0 monthly fee

Effective interest rate on the product

Ultimate Package
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up to $30.95 monthly fee
Royal Bank of Canada
Savings Deposit
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Recommended FinScore™
no minimum deposit

Effective interest rate on the product

Royal Bank of Canada
I appreciate the transparency in the loan terms provided by Royal Bank of Canada, with no hidden fees or charges.
Royal Bank of Canada
RBC provided me with a flexible loan repayment schedule, making it easier to manage.
Royal Bank of Canada
I encountered some hidden fees when repaying the loan with RBC, making it more expensive than I expected.
Royal Bank of Canada
Unfortunately, the loan terms offered to me by RBC turned out to be less favorable than those of other banks.
Royal Bank of Canada
It's very convenient to use RBC's online services to manage my loan and make monthly payments.
Royal Bank of Canada
I obtained my home loan with RBC, and they were very flexible in setting terms that suited my financial capabilities.
High-interest savings account

Usually, savings accounts offer very low interest rates, so if you want to make money on your deposits (not just use your account as a temporary storage for your funds that you will soon be using for purchases, long-term savings, or investing in cars) a high-interest savings account is what you need. When buying an account, you should consider not only the interest rate.

What is a high-yield savings account?

A high-yield savings account is a savings account that pays much higher interest rates than other savings accounts. On average, high-yield savings accounts are paid 20-25 times more than other savings accounts. These savings rates tend to be higher due to the influx of online banks, which have much lower overhead costs, thus, savings can be passed on to customers. Brick-and-mortar banks sometimes offer these types of accounts but, normally, the best rates can be found at online banks.

How does a high-yield savings account work?

A high-yield savings account has little risk, however, it offers the advantage of a higher interest rate. Interest in a high-yield savings account is paid on the money you have on your bank savings account, however, most of the institutions offering the highest rewards usually do not offer other standard banking features and services, in this case, you may need to have a checking account elsewhere. Most high-yield savings accounts do not have ATM cards, and all inflows and outflows will be required to occur via electronic transfer or mobile check deposit. p>

In which case you should open a high-yield savings account?

You should open a high-yield savings account if you are comfortable with the fact that your bank operates exclusively online and does not offer all standard banking services. A high-yield savings account is good for those who do not mind the inconvenience of having multiple accounts at different banking institutions. p>

A high-yield savings account could be an ideal option for those who want to leave extra money in a bank, do not need immediate access to it, and want money to grow faster than in a regular savings account. It can be used as a reserve fund or to save money for bigger purchases. p>

How to open a high-yield savings account?

Savings account can be a great place to store the money you need for a big future purchase, or just to get through financial emergencies. However, if you choose the wrong savings account, there is a risk that you will not earn any money due to inflation and possible fees – in some cases, you may even lose money.

Instead of opening a savings account that your current bank offers, take a look at high-yield savings accounts and open one with the highest interest rates and suits your needs. Here is a step-by-step guide on how to do find the best high-yield savings account.

1. Purchase at the best prices

If you have a checking account in a large bank, there is a high possibility that the savings account rate it pays out is not too high. In some cases, it might be not significant at all. However, with the advent of the Internet, we now have an opportunity to choose a bank or a credit union out of hundreds. If you want to stay ahead of inflation with your savings, you may need to open a high-yield savings account in addition to the one you already have.

It is also possible that you already have an account in the highest paying institution, therefore, before you start to search for another institution, don’t forget to check how much you can make in a savings account in your existing bank or credit union. With this information, you will be able to compare institutions and see how much you can earn from your savings elsewhere.

The next step is a market assessment which will show how much the best high-yield savings accounts are currently paying.

You may notice that very often the best rates are offered by online banks. This is due to the fact that banks operating only on the Internet do not incur the overhead costs of creating, operating and staffing branches and can attract customers throughout the country. Hence, they often pay the most competitive deposit rates in the country.

If you prefer brick-and-mortar institutions, the best way to find the most affordable local rate is to call the institution you are interested in, or to conduct online research among banks and credit unions that have branches in your area.

2. Choose the institution that suits you best.

Once you have done your research and identified the rates, it is time for you to make your choice. If you are lucky enough to find that your current bank or credit union's savings interest rate is competing well with the best ones in the country, then visit your institution's website and open new savings account there. It is very convenient to have a single online sign-in for both checking and savings accounts as well as instant transfers between two accounts. Moreover, the process of opening an account will be much easier and faster as your bank has already verified you in its system.

However, you might be like one of those customers who tend to explore and rate products. In this case, you will find out that you can earn a little bit more by opening a savings account in another institution. In fact, some of the best national scores are 20-25 times higher than the average.

If the highest score in your list of applicants goes to a credit union, make sure you meet its eligibility criteria, because credit union requires you to become a member first. Any credit union ranked among the best savings accounts is identified as open for members throughout the country. However, joining some of them can cost some money but, usually, you can find this information on the institution’s website.

The final step in deciding which institution, from the ones with the highest rates, suits you the best is to collect information about any fees and account requirements. Is the stated interest rate a promotion that will end on a specific date? Is there a minimum balance that you will be required to keep in your account? Does the stated interest rate only apply to balances above or below certain minimum and maximum balances? Are there any inevitable fees? The answers to these questions should help you narrow your list of the institutions with the highest rates to one or two.

3. Fill in the form.

Once you've decided in which institution you will open your new high-yield savings account, it is time to fill out the required application. You will most likely be asked to do it online. Usually, it takes only 10 minutes or so. You will need to provide the institution with your full name, address, telephone number, email address, and social security number as your income will be taxed. You will also need to provide detailed information from your driver's license, if you do not have a driver's license, a passport or other government-issued ID with your photo can usually meet this requirement.

You also need to decide if you want to open this account as an individual or in cooperation with another person, for example, your spouse. If you choose a joint account, you will need to provide the same information for the second applicant as you did for yourself.

Thereafter, you will most likely be asked a series of multiple-choice questions about your past, such as past addresses, past or current employers, and debts. All of these are designed to confirm your identity. Your application will be approved after successful questionnaire completion.

If you are opening an account in a brick-and-mortar bank, you will have an opportunity to do that at the nearest branch. Moreover, these institutions also give you the opportunity to open an account via their website. It will not only save your travelling time but also account opening process will be much faster if you do it online, rather than personally with a bank employee.

4. Fund your new account.

Some institutions require you to set up an electronic funds transfer from an external account to a new account immediately during the application process in order to make an initial deposit. Others either do not require a minimum deposit amount or will allow you to open an account first and fund it later.

Transferring money from another bank is the most common way to fund a new savings account, but some institutions provide options like sending a paper check, making a mobile check deposit, or even use a credit card to pay your initial deposit. Beware of the credit card method, since some card issuers consider it to be a cash advance, which will be charged huge interest from the time the transaction was made.

No matter you do this during the application process or later, in order to fund your new account from your existing bank account, you will be required to provide the institution's routing transit number and your account number. The online application may request your bank login credentials so that it can instantly verify your account. Otherwise, it may send two trial deposits to that account, which you can use to verify your account over the next few days.

5. Register for Internet Banking and download the app.

Once your new account is open, you will want to register for this institution’s online banking. Sometimes you can do it immediately after completing an online application. Other banks and credit unions may require you to wait a few days until you receive an email or letter with the account information you will need for your registration.

After you set up your online account verification, be sure to write down your username and password in a safe place or using a password manager. Then you can proceed to set up your banking application on your smartphone or tablet. All banking apps are free to download. Once you open your app, you will need to enter your username and password to start using it.

6. Designate beneficiaries.

In case you have not done it during your application process, you should log into your account and designate one or more beneficiaries who will inherit your account balance if you or any joint account holder pass away. Usually, you can designate a primary beneficiary on your account, however, some accounts allow you to designate secondary beneficiaries who will inherit the account balance in case the primary beneficiary passes away. A typical scenario would be to designate your spouse as the primary beneficiary (unless he or she is co-listed on the account) and your children as secondary beneficiaries. But whom you will choose as recipients for this account only depends on you, your situation and circumstances.

7. Turn on push and mail notifications.

It is very important to review your account notification settings. You can set or disable alerts, for example, when a deposit or withdrawal exceeds a certain amount, or when your account balance is below a set minimum. Often, you can also choose if you want any active alerts to be sent to you by email, text, or in-app notifications.

Also consider receiving a paperless statement. Electronic statements are often recommended as better protection against identity theft than receiving statements by mail, however, you can choose a method that is the most convenient for you. Note that some accounts, especially in online banks, may require you to select an electronic statement or charge a monthly fee if you request a paper statement.

8. Link additional transfer accounts.

Most probably, you have already linked an external bank account to your new savings account while setting up your initial deposit transfer. However, in most institutions, you can link multiple external bank accounts. This can be useful if you have accounts in more than one institution or, for example, frequently transfer funds to your children's accounts.

9. Follow the rules of your account.

Finally, you need to make sure you understand all the rules and requirements of your account so that you can use it effectively with zero or little commission in the future. In addition to the federal requirement that you do not exceed six withdrawals per each statement cycle, also, check if a minimum account balance is required. If so, make sure your balance is above this minimum.

Don’t forget to check if there are any other cases in which additional fees may apply. Some accounts are free, with minimum requirements. While on other accounts, you can take more complex actions to avoid monthly fees, such as creating a direct deposit, creating a regular transfer, or having a linked account in the same institution. Whatever the rules are, in order to maximize your profits you have to avoid commissions and be as careful as possible.

What are the benefits of using a high-interest savings account?

The main advantage is mentioned right in the name – it is a high-interest rate on the money on your savings account. It means you get more money just by keeping your money there! However, there are other aspects of high-interest savings accounts to consider, especially regarding taxes.

How to compare high-interest and traditional savings accounts?

High-interest savings accounts offer you bigger interest rates than regular savings accounts. These numbers depend on many factors, for example, some high-interest accounts offer an above-average interest rate, but you will have to maintain a minimum balance. Others may offer you a lower interest rate with fewer restrictions. There is no right or wrong choice. Depending on your priorities one or another will suit you better.

High-interest savings accounts and traditional savings accounts share some common features, for example:

  • Interest rate. Both accounts reward you with interest paid to your account balance. But while on high-interest savings accounts you can earn over 1%, the interest rate on other savings accounts generally won't be that high.
  • Interest tax.You pay taxes every time you earn money – it’s just the way it is. The interest you receive does not differ from your other incomes and will be taxed at the same rate. If you want to reduce the amount of taxes, you can consider other investment options.
  • Insurance.You can rest easy at night knowing your savings are safe as long as they are held on a savings account. Canada Deposit Insurance Corporation (CDIC) protects savings accounts in major banks, coverage is free and automatic.
  • Availability.The longer you save money, the greater reward you will receive, but your money will always be there when you need it. Whether it is a regular savings account or a high-interest savings account, you can withdraw money on your schedule (although you may have a limited number of free transactions per month, so keep that in mind).

Take your savings plan to the next level.

High-interest rates can certainly help you reach your savings goals faster, and while a high-interest savings account keeps your balance sheet safe with good returns, it is not your only option.

Just like diversifying your investments is a good idea, consider distributing your savings. Canadians have access to excellent tax-protected savings plans, savings accounts, and investment products. Here are some popular options that you can combine to create your own personal saving strategy:

Tax-Free Savings Accounts (TFSA)

A Tax Free Savings Account (TFSA) is a nontraditional savings account: you can hold within TFSA various investments (or cash), they have restrictions on deposits and withdrawals, but the interest you earn is tax-free.

TFSA are very versatile - in addition to regular cash deposits, you can hold:

  • Mutual investment funds
  • Guaranteed investment certificate (GIC)
  • Shares
  • Bonds
  • Exchange traded funds (ETFs)

On the other hand, any market-linked investment is vulnerable to stock market gains and losses. So while there is the potential for increased interest, there is also the possibility that your TFSA balance could fall if you have invested in, for instance, mutual funds or ETFs.

After all, it is up to you - you can decide how to invest your savings in TFSA based on your risk tolerance. Not sure what kind of risk you are willing to take? A financial planning specialist can help you get started!

Registered retirement savings plan (RRSPs)

Registered Retirement Savings Plan (RRSP) is an account for retirement savings. Just like the TFSA, the RRSP has an annual contribution limit and offers tax breaks on your annual income (the exact amount of tax saved will depend on the sum you contribute each year)..

Unlike the TFSA, RRSP withdrawals are taxed, so a good idea is to link the RRSP to an account that gives you easier access to your money - especially if you think you might have to spend some savings before your retirement.

Guaranteed investment certificate (GIC)

Guaranteed Investment Certificates (GICs) are low-risk investments that are locked in for a specific period of time - often one or two years, but up to five years (or just 30 days). Interest on these accounts is usually taxed, unless the GIC is owned by the TFSA.

GIC is a middle ground if your goal is to earn interest on your savings, but you would rather know exactly how much you would receive instead of rolling the dice. It is also useful for achieving short-term goals, such as accumulating a single lump sum annually to pay off your mortgage faster.


Because of the power of compound interest, a high-interest savings account is an excellent option for short-term and long-term savings, but it is only part of a strong savings strategy. If you combine a high-yield savings account with an investment that can reduce the amount of tax you have to pay, you may be surprised at how quickly your money grows.