How to Choose the Best Savings Account for Me

We all know it’s smart to set money aside—but choosing the right savings account can feel a little less straightforward. The good news? Different types of accounts offer unique benefits that can help accelerate your financial goals. Here are some helpful questions and answers to get you started as you compare savings accounts.

What to consider when looking for a savings account

If you’re asking yourself, “How do I know which savings account is best?” you’re not alone. Here are some key factors to consider:

Your financial goals

Saving up for a big goal—like a vacation or an emergency fund?

A high interest savings account (HISA) offers higher yields that can grow your money faster.

Another great option is a basic savings account, which is a safe place to stow your money separate from your chequing while earning interest on every dollar you deposit.

Do you spend a lot of time abroad, or often send/receive money internationally?

A foreign currency savings account can help you avoid exchange rate fluctuations and conversion fees.

Are you looking for a tax-savvy way to save for the future?

Registered savings accounts (also called investment accounts) let you purchase and hold investments—like stocks, bonds and mutual funds—and offer special tax advantages that traditional savings accounts don’t. Some common registered investment accounts include:

• Tax-Free Savings Account (TFSA)

• Registered Retirement Savings Plan (RRSP)

• First Home Savings Account (FHSA)

• Registered Education Savings Plan (RESP)

Pro tip: As you’re researching savings accounts, you may find that more than one type suits your needs. The great news? You can hold multiple savings accounts and enjoy the benefits they have to offer.

Interest rates

When choosing a savings account, it’s crucial to understand how interest rates are calculated and how they can help you meet your savings goals. Even small differences in rates can add up, especially if you’re saving for the long-term, here are a few important things to note.

• Interest rate payment frequency: Most banks calculate interest daily and deposit it monthly, so the higher your balance and interest rate, the more you’ll earn over time.

• Promotional periods: Some banks also offer a high promotional interest rate for a limited time which can give your savings a boost up front—but you’ll want to know what your rate will be when the introductory offer ends.

• Tiered savings accounts: These accounts allow you to earn a higher rate of interest as you increase your savings, which can be beneficial if you plan to make regular deposits.

When deciding which type of savings account is best for you, take the time to understand exactly how interest works on the account, so you can maximize your savings.

Service fees

Some savings accounts charge you small fees for withdrawals over the monthly limit, transfers to an account at another bank, or other transactions. Be sure to note all fees associated with the savings account you’re considering, so you can weigh these against the account’s perks.

Access to your funds

Would you like the option to regularly withdraw from your savings account, or are you saving for a rainy day and won’t need to access your money often? Some savings accounts that yield higher interest rates have the drawback of withdrawal fees or restrictions.

The financial institution

When you’re looking for a secure place to grow your savings, it’s important to choose a bank you can trust with your money. But what are the most important boxes to check when shopping for a bank?

• Deposit insurance: The bank you’re considering should be a member of the Canada Deposit Insurance Corporation (CDIC), which protects your deposits in the unlikely event that the financial institution fails.

• Reputation and reviews: The Financial Consumer Agency of Canada is a good place to check for any official complaints or red flags about a bank you’re considering. You can also look for awards or mentions in trusted publications like Forbes or MoneySense—these are good signs of an institution’s credibility. And don’t forget to scan through Google Reviews for real customer experiences and insights you might not find on a bank’s website.

• Accessibility and bank experience: Make sure you’ll have 24/7 access to customer support in your preferred language. Check the quality of the bank’s mobile app and banking website if you prefer to bank online. If you plan to do most of your transactions in person, make sure there are branch and ATM locations near you.

Other considerations

As you’re weighing your options, think about who needs access to the savings account, how much money you’re starting with, and how you prefer to bank—whether it’s in person, online or at an ATM.

Should I get a high interest savings account?

With a high interest savings account (HISA), you can watch your money earn money while it sits in savings, without the risks associated with some investment products. If you think this could be the right option for you, consider the pros and cons:

Pros

• A higher interest rate on every dollar, compared to a traditional savings account

• Easy access to your money—you stay in full control of your funds

• Peace of mind knowing that your deposits are protected by the Canada Deposit Insurance Corporation (CDIC)

Cons

• Limited monthly withdrawals, with a small fee for extra debit transactions

Pro tip: Some of the best high interest savings accounts in Canada offer strong digital tools for people who prefer to bank online.

Which high interest savings account is right for you?  

Look for a high interest savings account that balances your savings goals with any withdrawal restrictions or fees. Look for a strong, consistent interest rate—just be sure to read the fine print, as some rates are only promotional. Accounts with no monthly fees, low or no minimum balance requirements, and easy transfers to your chequing account offer added flexibility.

Since some HISAs are online-only, look for a financial institution that has a strong digital presence, with a user-friendly website and a good mobile app.

How to open a high interest savings account

Once you’ve selected a financial institution and know you want to open a HISA, getting one set up is quick and simple. Here’s what to expect:

• Start the application
  You can open a high interest savings account online in just a few minutes. You’ll need to provide basic personal information like your name, address, SIN and a valid ID.

• Verify your identity
  This could involve answering security questions or additional steps, depending on the bank’s process.

• Link and fund your account
  Connect a chequing or other bank account to make your first deposit—some HISAs require a minimum deposit to open.

• Set up your preferences
  Choose whether you want paper statements or electronic statements, set savings goals, or automate your deposits if the bank offers these features.

What are the different types of savings accounts?

Basic savings accounts

A basic savings account gives you a safe place to set your money aside, offering modest interest rates and helping you grow your balance over time.These accounts are a good choice for anyone who wants to take advantage of the ‘out of sight, out of mind’ principle of saving. Typically, they have no monthly fees or minimum balance requirements, and are a solid, straightforward option for anyone who wants to start building their savings.

High interest savings accounts (HISAs)

A HISA is a smart way to grow your money faster while keeping it easily accessible. They offer a higher interest rate than basic savings accounts, which means every dollar you deposit earns more, helping your savings add up quickly over time.

HISAs are a popular choice for anyone who wants to earn interest without locking their money away in a long-term investment. You can withdraw funds as needed, although HISAs usually have a limited number of withdrawals per month. Whether you’re building an emergency fund or saving up for something big, a HISA gives you the best of both worlds: growth potential and accessibility—all with the simplicity and security of a traditional savings account.

Registered savings accounts

Registered savings accounts, such as a TFSA, RRSP, FHSA or RESP offer more growth potential than a basic or high interest savings account because they are investment accounts. You can hold investment products in them, such as mutual funds, guaranteed investment certificates (GICs), exchange-traded funds (ETFs), stocks and bonds, all of which have the potential to generate higher returns.

On top of that, they offer valuable tax benefits, such as tax-deferred or tax-sheltered growth on your investment earnings. The trade-off? These accounts tend to be a bit less flexible. There are annual contribution limits and, in some cases, rules around how long your money must stay in the account.

Foreign currency savings accounts

A foreign currency account lets you save money in U.S. dollars or another foreign currency without converting it to Canadian dollars. This can be especially helpful if you travel often, shop online in another currency, or receive payments from abroad.

By holding your savings in the same currency you spend or earn, you can avoid exchange rate fluctuations and conversion fees. These accounts are a convenient option for anyone who manages money across borders while still wanting the security and simplicity of a traditional savings account.