Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
The difference 1% can make to your savings
A slight increase in your interest rate can add up to thousands over the life of the account.
Comparing savings accounts to get the best APY can help you rack up a lot of extra interest — but watch out for impressive introductory offers that are attached to less-than-stellar long-term accounts.
- Zero everyday banking fees
- Free transactions
- No minimum account balance
EQ Bank Savings Plus Account
With no everyday banking fees and free transactions, open an EQ Bank Savings Plus Account and get an interest rate of 1.25%.
- Account fee: $0
- Interest rate: 1.25%
- Min. deposit to open account: $0
- Transactions: Unlimited & free
How much difference does an APY increase of 0.50% or 1.00% make?
A percent, or even half a percent, difference can add up to significant savings over time. For example, Rebecca puts $40,000 into a savings account with a 2.50% APY, and adds $750 to her account each month. After five years, she’s made $8,200.45 in interest.
If she would have opened an account with a 3.00% APY instead of 2.50%, she would have made $9.949.71 in interest, or about $1,749 more in the same time period.
Now consider if Rebecca’s APY was 3.50%, she would have made $11,737.30 in interest— that’s an extra $3,537 over five years! In this example, choosing an account with an APY that’s just 1% higher would lead to several thousand extra dollars after only five years.
How to get higher interest rates
To get a bump in your savings account APY:
- Compare accounts. It’s worth it to take the time to compare accounts at different banks and even within the same bank. If you meet the monthly minimum balance, a money market account might net you a higher interest rate than a traditional savings account. If you won’t need to access your money anytime soon, consider opening a GIC account.
- Consider online and challenger banks. Newer online-only and app-based “challenger banks” don’t have to deal with the overhead that comes with operating physical bank branches, and they can pass those savings on to you in the form of better interest rates.
- Look for introductory offers. Some money market and savings accounts will offer increased rates for an introductory period. Just make sure that you’re still happy with the rate your account will revert back to when that period is up.
Hidden fees and lower interest rates in the fine print
Banks might require you to meet a minimum balance requirement in order to get the advertised interest rate. Some will charge monthly fees if you don’t meet the required balance threshold, which can quickly eat into your savings.
Compare all savings accounts
Compare apps that reward you for your spending
Even a small difference in interest rate can make a significant difference to your savings over the course of several years. If you’re not convinced that you’re getting the best interest rate out there, compare other savings accounts and see if making a switch can start saving you more with a better APY.
Frequently asked questions
More guides on Finder
Investing in your 30s: 8 wealth-building tips
Prepare to revamp your asset allocation and explore new investment classes when you’re in your 30s.
HSBC Student Chequing Account Review
Post-secondary students in Canada can take advantage of this HSBC Student Chequing Account with unlimited transactions and no monthly fee.
TD Access Card Review
The TD Access Card is a widely accepted, flexible debit card with an array of options.
HSBC Student Debit Card Review
Apply for an HSBC Student Account to enjoy unlimited withdrawals and a handful of benefits with this premium debit card.
CIBC US$ Personal Account review
The CIBC US$ Personal Account is optimal for individuals who regularly manage US dollars or travel to the US often.
CIBC Premium Growth Account review
The CIBC Premium Growth Account is a simple savings account that can be used for a variety of purposes and by a broad range of people.
CIBC Smart Plus Account review
Frequent travellers and heavy bank service users will benefit from the CIBC Smart Plus Account.
Scotiabank Scotia U.S. Dollar Daily Interest Account review
Earn interest when you deposit your savings in US dollars with this cross-border account.
Brim World Elite Mastercard review
Enjoy multiple forms of insurance and a top return on points with this premium credit card.
Scotiabank Money Master Savings Account Review
Earn interest on your savings and get free Scotiabank transfers when you sign up for this fee-free account.
Ask an Expert
You must be logged in to post a comment.