Are you saving your money? Do you tend to eat beans for the rest of the week? Where do you keep your savings?
I am going over my top five picks for savings accounts in Canada. So if you want to know where to put your savings, make sure you stick till the end.
Why do we need to save?
Why do you need to put your money in a savings account to protect it don’t keep your money in a shoebox under your bed Anything could happen to your money from a fire to being robbed or mice deciding they want to make a nest out of your money and chew it up.
You may also want to keep your savings separate from your checking account, so you don’t spend your savings and you can track them better. But the biggest reason why you should keep your money in a savings account is so you could earn interest, your money is slowly losing its value due to inflation.
The average annual inflation rate in Canada is about 2%, which means goods and services will be 2% more expensive every year. So your $100 will only buy $98 worth of groceries next year, and so on. So we should use high-interest savings accounts to keep up with inflation.
Why don’t you just invest your savings to get a much higher return investing should be long term and savings should be short term. If you want to buy a house next year, you wouldn’t invest what you have saved because anything could happen to the market and you may not have enough time to recover. So you should keep any short-term goals in a savings account. Also, it’s good to have a certain percentage of your investment portfolio in cash. Why?
Well, there are many reasons to reduce your risks to take advantage of buying opportunities. Or maybe you’re saving for a different investment opportunity, like real estate or business savings accounts are also a perfect place for your emergency funds.
They’re liquid enough to get easy access to them when you need them, and you can still learn interest in them. Now before we get into the list if you’re new here,
Spoiler alert, none of the big banks have made this list and I have no clue why this list only consists of online Banks
#1 Achieva Financial
Achieva financial daily interest savings account to only credit union on this list. Their current interest rate is 1.5%. There’s no minimum balance required no monthly account fees to worry about and you get one free withdrawal per month, but be aware that there’s a lot of other fees you can run into. So this account is strictly for saving other than the interest rate.
What else do I like about this account the green for the green program, you get paid $1 per month when you choose to get your documents electronically who doesn’t like free money. Also the referral pedal program you can earn $100 per year when he successfully referred for friends $25 per friend. And if you find someone else’s referral code, you can earn yourself a $25 signup bonus so you could earn yourself $137 in your first year.
On top of that the interest earned on your balance. Also, Achieva has competitive TFSA and RRSP rates and some of the highest GIC rates but remember that gi C’s are locked in and there’ll be no good for an emergency fund.
#2 Tangerine Bank
tangerine bank savings account their current interest rate is zero point 15%. Wait, hold on, hear me out first. This rate is still three times more than your brick and mortar bank, with no minimum balance, no monthly fees, no withdrawal fees.
Currently, they have a promotion where you can earn 2.5% for the first five months. This rate is great for those high-interest rate chasers to use tangerine for five months and then move on to the next highest promo rate. Also tangerine offers promo rates for existing customers.
So when the promo was over-transferred from another bank back to tangerine, when another promo starts on top of this tangerine has a referral program you can get $50 for each successful referral, up to $150 a year and that means you can use someone else’s code to earn $50.
When you sign up, tangerine also offers one of my favorite checking accounts and you have a set of good credit cards.
# 3 Wealthsimple
currently, wealth simple cash offers an interest rate of 0.9%. This rate may not be as high as others on this list. But this is not your ordinary high-interest savings account. Well, simple cash is a hybrid spending and savings account.
It’s technically a reloadable prepaid visa account, but it kind of works like a checking account that can earn high interest. There are no monthly fees, no withdrawal fees, no foreign exchange fees, and even have ATM reimbursements.
This is also the only account on this list that comes with a card and some metal card at that now you can get debit cards with most of the options on this list.
But that requires opening up a checking account along with your savings account. So what’s the con about this account? Well, it’s not fully out yet since the whole pandemic thing a lot of companies have delayed upcoming features and new products.
Wealth simply cash is currently featuring just the saving functions of the account so you can deposit your money there and still earn 0.9% interest but although spending features are on hold this account can be perfect for some that want the quickest access to your savings like in an emergency.
But having your savings so accessible can be a bad thing to this account also for someone with high monthly spending instead of your money sitting in a checking account earning nothing too late gets used, why not go with wolf simple cash and earn 0.9%
#4 Motive Financial
This high-interest savings account has a current interest rate of 1.75%. This is the highest interest rate on this list, but it’s not the highest in Canada at the moment that title belongs to Canadian Tire bank with 1.8% interest,
but I believe that their interest rate will eventually drop lower than the savvy savings account. What I like about the savvy savings account is that their interest rate has been constantly one of the highest interest rates in Canada.
If not the highest interest rate in Canada, there is no minimum balance required for free deposits, unlimited transfers between modes of accounts and free ATM withdraws at the exchange network ATMs.
What’re the downsides of this account additional withdrawal costs $5 you will also need to pay $1 per transfer and if you are over the two free withdraws, then you have to add another $5 to the $1 transfer this account is not for someone that’s always dipping into their savings account because of their withdrawal fees you need to be a very disciplined saver and if you are disciplined saver, you should take advantage of this interest rate motive financial also offers a TFSA account with a current interest rate of 1.75%.
Currently, one of the highest in Canada, if you’re not aware of any interest earned in a high-interest savings account is taxable at the same marginal rate as any general income to avoid taxes on interest, you can open up a TFSA like the one motive offers, but consider that you only have a certain amount of contribution room. So you should save that room for investing.
There are lots of rules to a TFSA account, so using them for emergency funds or your short-term goals isn’t recommended.
Now for two runner-ups that didn’t make this list motusbank high-interest savings account and alternative banks high interest a savings account their interest rates aren’t the highest but they are solid banks and they have many other great products.
#5 EQ BANK
you probably already guessed it EQ bank savings Plus account with the current interest rate of one point 70% Oh, and if any of these rates change
EQ bank savings account is currently one of the highest interest rates in Canada since its inception, the interest rate of the Savings Plus account has been among the highest in Canada.
I can’t say the same thing about the Canadian Tire savings account. The Savings Plus account doesn’t require a minimum balance. They have zero everyday banking fees, free transfers free he transfers, free bill payments, and low fees on international money transfers.
This makes the savings account perfect for any type of savings from short term goals to emergency funds to holding cash in your investment portfolio.
This account is also for any type of saver with the flexibility that EQ offers. You can transfer money in and out and not worry about fees even cut out the middleman and pay a bill directly from your savings account.
One more feature I should mention is that currently, EQ bank has a referral program where you can earn a maximum of $500. So if you have friends that want to save money, you can make yourself some money. Now the account itself doesn’t have many flaws compared to other online-only accounts one B could only hold a maximum of $200,000 in your account.
If you have $200,000 in cash. Well good for you. There are a few cons with EQ bank itself for one they don’t offer a checking account so no access to a debit card and two they don’t offer TFSA or RSP accounts but like I already said you should save your TFSA for your investments.
Currently, I keep my three to six months of living expenses and EQ bank savings Plus account I can easily eat transfer or EFT transfer my savings to my checking account whenever I need it. And while sitting there, it’s earning one of the best interest rates out there. But ultimately you decide where to keep your hard-earned dollars.