Wednesday, 22 July 2020

Top 10 High-Interest Savings Accounts in Canada

Before I share the banks that have the highest interest in Canada. I first want to share just a few pieces of advice. You may be wondering why should I care about high interest in a savings account. Well, the thing is, if you're going to be tucking your money away for your short-term goals. That is what a savings account is for. Is for you to save up money for a short-term goal, and what that could be is a goal that will take you one to two years to reach. That could be like a trip next year, that could be saving up for Christmas gifts, it could be a shopping spree, it could be an emergency fund which is very very important, it could be whatever the hell you want. you're gonna tuck that money into a savings account and just leave it there until you need it. 

But in the meantime, don't you want that money to grow? make some money on your money, well, you do that by picking a savings account that has high interest, and even though I will be sharing those banks that have high interests, it's not that high, not as high as past years, past decades, where it's been extremely high.

It's going to be within the one to two percent realm and that's what we're dealing with, so it is what it is. Another thing to think about too is you want to not just pick a bank that has high interest, you want to make sure that the interest it is giving you back, is at least more than inflation.

Let's talk about what banks offer the highest interest in Canada 

I'm going to walk you through 10 different banks available in Canada that have high interest. And what that means is above inflation or at least to match inflation. So everything I'm going to be showing you in this article, they are banks that have interest rates that are 2% or above

1. People Group

If you don't know much about people's group, that is okay. It was a boutique financial services company that started in 1985 in Vancouver, back then, they specialized mainly and just mortgages, but now, they offer a variety of different products including their e-savings account. People's group which is where this e savings account is available, it is cdic insured which you can find this logo right at the bottom on their website, and they offer a decent saving as account. No monthly fees, no minimum deposit, a bunch of other important info you can check out on their website, and for their interest rate.

You can see that they have an interest rate of 2%, so not above inflation is just keeping pace with inflation, so if you use this savings account, you're not losing money, but you're not really making more than inflation.

2. Wealthsimple

I know you're probably like, what? they have a savings account? they're not a bank. It's true, they're not a bank, they're a Robo-advisor, but they do offer a savings account. Surprisingly, it's a relatively new product that they offer. Now, how they get around this is they don't hold your money just like with your investments, they do not hold your money, it is Canadian shareowner investments that have your funds. Canadian shareowner investments are cdic insured, which is why your funds there if you use the savings account is totally safe, where your deposits actually live is, in shareowners business accounts at partner banks. What that means is you give your money to Wealthsimple. Wealthsimple gives that money to shareowner, and shareowner disperses it between some of its partner banks. I know that's sort of confusing, but when you open an account it's simple. 

One of I think the key benefits to this is your deposits actually count for one of their tiers, so they have just the basic tier, the black tier, and the generation tier. You may or may not be eligible for this one, I don't know many people eligible for that one, but basically, it means, if you have over a hundred thousand dollars worth of assets with Wealthsimple, then you get a bunch of perks like a financial planning session, some tax-efficient funds that are more for investments, but also VIP airline lounge access which is pretty cool.

3. Hubert Savings Account

I've got a bank that you may have never heard of because I sure didn't, but I found it when I was doing research on high-interest savings accounts in Canada. So Hubert financial is a division of Sonova credit union which is a credit union based out of Manitoba. FYI. throughout this article, a lot of these online banks that have savings accounts are divisions of Manitoba credit unions. I don't know why, but it's a trend, I guess. Sonova the credit union was actually established 60 years ago and has 13 locations throughout Manitoba. But Hubert Financial launched in 2010. Now, Hubert Financial is not cdic insured, however, deposits made to Hubert Financial are actually guaranteed by the Deposit Guarantee Corporation of Manitoba. So on its website it says, it's totally safe, your deposits are 100% guaranteed. That's just something that's important to know. Also, you don't have to live in Manitoba or be a Manitoba resident to open a Hubert financial account, it is totally Canada wide. 

The interest rate is 2.25%. So it's above inflation.

5. Modus Bank

ModusBank is a subsidiary of the meridian credit union which is an Ontario credit union. And it the online modus Bank launched in April 2019. So it is, of course, cdic insured. And it offers an interest rate of 2.25% on just a regular high-interest savings account. But if you open a TFSA a tax-free savings account with them, you can actually earn 2.5%.

6. Oken Financial

Oken financial is owned by home Trust Company. And home Trust Company started as just a trust company back in 1987. Oken financial launched in 2013, they also offer 2.3% as their interest rate, and they are cdic insured.

7. Alterna Bank

Alterna Bank is, of course, a subsidiary of alternate Savings, another Ontario Credit Union. Alterna Bank though the online bank was launched in 2000, it, of course, is cdic insured, and it is offering currently a 2.30% interest rate on their e savings account

8. Achieva Financial

They are a division of Cambrian Credit Union. Achieva financial the online bank launched in 1998 and is considered one of Canada's first online-only financial institutions, there's a little nugget Freya. So deposits are protected by the Deposit Guarantee Corporation of Manitoba like many of the other online banks that are divisions of Manitoba credit unions, so that's just how it goes, and the interest rate that they are offering on their savings account is 2.3%

9. Wealthone Bank of Canada

I did not know existed until I did the research for this article. Wealthone is new, they opened their doors in 2016, and they're very focused on serving the Chinese Canadian community online, but also they have some offices in Ontario and British Columbia and they are cdic insured, and the interest rate that they are offering clients is 2.3%

10. Idealsavings

Ideal savings is a division of Carpathia Credit Union, and much like all the other credit unions that are from Manitoba that have online banks, it does cdic insured, instead, deposits are guaranteed by the Deposit Guarantee Corporation of Manitoba. And ideal savings itself launched only in July 2016, however, it is offering interest of 2.4%.


That is it, make sure you visit their website and learn more about them before you start putting your money into those savings account

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