High-interest savings account

High-interest savings accounts (HISA) are bank accounts offering a rate higher than traditional daily savings accounts. In Canada, there are two types of HISA, a savings account offered by financial institutions such as banks (including virtual banks) and credit unions and fund-based investment savings accounts offered by discount brokerages. HISAs can be used for a cash allocation in a portfolio, or for cash reserves such as an emergency fund.

Conventional high-interest savings accounts

History

Conventional HISAs are bank accounts offering a rate higher than traditional daily savings accounts. These high-interest accounts are generally considered to have been introduced in Canada by ING Canada, now Tangerine, in 1997, which was one of the first "virtual banks" (with no branches), and offered significantly greater interest than the savings accounts then offered by major banks. Several other providers entered the market later.

Popular choices

Regular rates

The following table lists examples of online banks popular on the Financial Wisdom Forum for their HISAs with regular 'high' rates:

Institution	Owned by	CDIC coverage and membership
Alterna Bank	Alterna Savings, an Ontario credit union	Yes
Canadian Tire Bank	Canadian Tire Corp (TSX: CTC.A)	Yes
EQ Bank	Equitable Group Inc (TSX: EQB)	Yes
Manulife Bank	Manulife (TSX: MFC)	Yes
LBC Digital	Laurentian Bank (TSX: LB)	Yes, part of Laurentian Bank
Motive Financial, previously Canadian Direct Financial	Canadian Western Bank (TSX: CWB)	Yes, part of Canadian Western Bank
Oaken Financial	Home Capital Group (TSX: HCG)	Yes, two separate entities: Home Bank and Home Trust
Peoples Trust	Privately owned	Yes

These institutions also typically offer Tax-Free Savings Accounts (TFSAs) and often Guaranteed Investment Certificates (GICs). While these are all CDIC insured institutions, there are also online high-interest savings accounts offered by divisions of Manitoba credit unions, covered by provincial deposit insurance.

Another sometimes mentioned option for Quebec residents is "Épargne Placements Québec", an administrative unit of the provincial finance ministry. Their HISA-like "flexi-plus savings" product can be competitive with the online banks.

Promos

The following institutions are also often mentioned on the forum. They typically have lower regular HISA rates but often run promotions:

Institution	Owned by	CDIC coverage and membership
Simplii Financial, previously PC Financial	CIBC (TSX: CM)	Yes, part of CIBC
Tangerine	Scotiabank (TSX: BNS)	Yes

If you want to deal with these institutions offering promos, you might need another HISA from a bank offering better regular rates, to use while you wait for the next promo.

The big banks strike back

Traditional institutions now offer similar plans, although they often have minimum balance requirements or transaction fees designed to prevent them from being a direct replacement for a general savings account. The following list contains links to savings account options, including HISAs, at the big-6 Canadian banks:

• BMO savings accounts
• CIBC savings accounts
• National Bank savings accounts
• RBC savings accounts
• Scotiabank savings accounts
• TD savings accounts

The account sponsor should be contacted for the details on establishing the account, transferring funds, account minimum, deposit insurance and other requirements.

Current rates

Current rates for many HISA accounts can be found at Cannex or Canadian high interest savings account: Comparison chart. The latter indicates which accounts are available in Quebec and which institutions are credit unions.

Limitations

Although these accounts may be suitable for normal savings account use, some of them are not eligible for use in a Registered Retirement Savings Plan (RRSP), nor are they convenient for holding day-to-day funds at brokerage accounts, and the Investment Savings Accounts mentioned below are an alternative for those purposes.

Fund-based investment savings accounts

Fund-based investment savings accounts (ISA) are alternatives to money-market fund (MMF), offered by many deposit-taking institutions. They trade as if they were mutual funds - that is, they are bought or sold as fund units, usually of $1 or $10 value - but actually represent a CDIC-insured savings account. Settlement date is T+1; that is, the business day after the trade.

These accounts can be used to park cash temporarily in brokerage accounts, including registered accounts, and are also suitable as a place to deposit emergency funds. However, some brokers may not offer all ISAs, or impose additional fees or conditions if the fund is not one of the brokers' own fund family. This may have the effect of restricting the investor's choice to a small group or a single fund. Nonetheless, for small investors they are often more convenient than Guaranteed Investment Certificates or Treasury bills.

A list of some of the applicable funds is given below; note that the fund identification codes in the first column are for "class A" funds which are typical. Some brokers are now offering "class F" funds which have better yields because they don't have embedded commissions; see the comments column.

Prospective investors should confirm fund availability, minimum purchase, and any fees (including penalty fees if the fund is sold within 90 days, which apply at some brokerages) with their brokerage before purchase. Some of this information may be available if the fund identification code (e.g., "RBF2010") is entered into the mutual fund selection box.

Several issuers offer similar funds from different corporate entities (e.g. XYZ Bank versus XYZ Trust), which likely have separate CDIC coverage (check the member list to confirm). However, accounts from the same corporate entity would be combined for deposit insurance purposes.

CAD Fund Symbol	USD Fund Symbol	Fund Sponsor	Comments
ATL5000 ATL5002 ATL5004	ATL5500	CIBC and affiliates including Renaissance	Try ATL5001 (F class)
BMT104 BMT109 BMT114	BMT124 BMT129 BMT134	Bank of Montreal and affiliates	-
BTB100		B2B Bank	Try BTB101 (F class)
DYN3054 DYN3064 DYN3074 DYN5000 DYN6000	DYN5001 DYN6001	Scotia Bank and affiliates	No-fee in Scotia Itrade accounts, where they represent the only choices; try DYN6004, DYN3055, DYN3065, and DYN3075 there (F class)
EQB1000 ETR1000	EQB1100	Equitable Bank / Trust	Try EQB1001 (F class)
HOM100 HOB100		Home Trust / Bank	Try HOB101 and HOM101 (F class)
IBN100	IBN200	ICICI Bank	Not available for registered accounts or TFSAs
MIP510 MIP710	MIP511	Manulife Bank / Trust	Try MIP610 and MIP810 (F class)
NBC100 NBC6100 NBC8100	NBC101	NBI Altamira (National Bank and affiliates)	Try NBC200, NBC6200, NBC8200 (F class)
RBF2010 RBF2020 RBF2030 RBF2040	RBF2014	Royal Bank and affiliates	No-fee in RBC Direct Investing accounts, where they represent the only choices; try RBF2011, RBF2021, RBF2031, RBF2041 (F class)
TDB8150 TDB8155 TDB8159	TDB8152	TD Bank and affiliates	No-fee in TD Direct Investing accounts, where they represent the only choices; try TDB8151, TDB8156, TDB8158, TDB8160 (F class)

Mr Thrifty maintains a similar list with current interest rates.

As securities priced under $3 are not marginable, HISA funds with a $1 unit value cannot be used as collateral for margin. On the other hand, ISA funds with a $10 unit price generally have a loan value of 95%, consistent with money market funds.

See also

• Cash and cash equivalents
• Short term cash returns
• Tax-Free Savings Account

Further reading

• Financial Wisdom Forum topic: "High interest savings, GICs and MMFs (2024)"
• Financial Wisdom Forum topic: "High interest savings, GICs and MMFs (2023)"
• Financial Wisdom Forum topic: "High interest savings, GICs and MMFs (2022) - rates"

External links

• Canadian high interest savings account: Comparison chart, includes current rates for a number of institutions
• Globe and Mail, The DIY investor’s guide to the best places for parking cash in an online broker account
• List of banks and credit unions in Canada