5% interest on savings accounts: Fact or fiction?
Can I get a 5% interest savings account in Canada, or is it just wishful thinking? We breakdown how 4%, 5%, 7% and 10% savings interest rates work.
When the Bank of Canada’s policy rate peaked at 5% throughout 2023 and 2024, times were good for savers. But recent rate cuts have seen savings account interest rates plummet too, so you might be wondering, can I still get a 5% interest savings account in Canada?
In this guide, we’ll look at current savings account interest rates in Canada to help you find the best rate and grow your bank balance sooner.
Can I get 5% interest on savings accounts?
It is possible to get 5% interest on savings accounts, but only usually as a promotional rate offered for a few months. After the promotional period, the 5% rate will drop to a much lower ongoing rate.
Online banks typically offer the highest ongoing savings account interest rates because they don’t have the same overheads as major brick-and-mortar financial institutions.
As for whether you can get a 5% interest savings account, that depends on the Bank of Canada’s policy rate, which is set based on factors like inflation and the overall health of the economy.
When the policy rate is at 5%, as it was during 2023 and 2024, you can expect to find 5% interest savings accounts. In fact, competition between financial institutions means that even higher savings rates may be available. But when the policy rate is well below 5%, there’s little chance of finding a 5% or 5.5% interest savings account.
Current savings account interest rates in Canada
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Finder Score for savings accounts
To make comparing even easier we came up with the Finder Score. Interest rates, account fees and features across 50+ savings accounts and 25+ lenders are all weighted and scaled to produce a score out of 10. The higher the score the better the account - simple.
Can I get 4% interest on a savings account in Canada?
Yes, you can get a 4% interest savings account in Canada. But in most cases, rates of 4% and over are only available for a limited promotional period, after which time the accounts revert to a lower standard rate.
If you want an ongoing 4.00% interest rate on a savings account in Canada, check out the KOHO Everything Plan. As well as that high rate, this hybrid account also pays unlimited cash back of up to 2% cash back on groceries, transportation, and food and drinks. The downside is that it comes with a $22 monthly fee.
So if you’re chasing the best rate with no monthly fees, you’ll want to compare savings accounts that offer high promotional interest rates. Options include:
- EQ Bank Personal Account: A hybrid account that pays Earn 3.50% interest on your money for 12 months and 1.25% thereafter.
- Scotiabank MomentumPLUS Savings Account: Earn a savings rate of up to 5% for 3 months when you open a Scotiabank MomentumPLUS Savings Account and a Scotiabank Ultimate Chequing Account. After the promo period, you’ll earn 0.55%.
- BMO Savings Amplifier Account: Earn 4.75% interest when you open both a BMO Performance Chequing Account and a BMO Savings Amplifier Account. Plus, earn up to a $700 opening bonus with the chequing account. Valid until July 2, 2025 . Open a BMO Performance Chequing Account to claim the cash offer and bonus interest rate.
- RBC High Interest eSavings Account: Earn 4.70% for 3 months, and 0.75% thereafter. Interest is calculated daily and paid monthly.
- Tangerine Savings Account: Earn 4.50% interest for 5 months (on the first $1,000,000 in deposits) when you sign up by July 31, 2025.. After the promo period, you’ll earn 0.3%.
- CIBC eAdvantage Savings Account: Earn up to 1.45% interest. Get a regular interest rate is 0.25% - 1.20%, and a smart interest rate of 0.25%. Plus, get a bonus rate of 5.00% (for 4 months).
Just be aware that these 4% savings account interest rates typically only apply for a short introductory period. After that time, you’ll get a lower interest rate.
How to qualify for a 5% interest rate or higher on savings accounts?
If you’re going to get a juicy 5% interest rate on your savings account, you may need to meet some specific criteria. Common requirements are listed below.
Promo period
Savings accounts with promotional bonus interest rates only offer a high rate for a limited introductory period. After the first 3-5 months, your account interest rate will usually switch back to a much lower standard rate.
New customer requirement
Promo interest rates are usually only available if you’ve never held the same type of account with the same bank before. In some cases, you’ll even need to be a first-time customer to qualify.
Minimum balance requirement
Some savings accounts have tiered interest rates — the larger your balance, the higher the rate you get. So in order to get the highest advertised rate, you may need to meet a minimum balance requirement.
Direct deposit requirement
Some bonus rate offers will require you to set up a recurring direct deposit to your savings account. You’ll need to deposit a minimum amount per month and maintain the deposit for a specified period.
Chequing account requirement
You may also be required to open a chequing account with the same bank in order to qualify for bonus interest. Be sure to check whether the chequing account comes with a monthly fee and how many transactions you can make each month before deciding if it’s right for you.
Alternatives to high-interest savings accounts in Canada
Searching for a 5% interest savings account but disappointed by the rates currently available? You might want to consider one of these high-interest savings account alternatives.
ETFs
Exchange-traded funds are investment funds that are traded on stock exchanges. They’re made up of a collection of securities, such as stocks and bonds, making it easy to create a diversified portfolio of assets. Many popular ETFs are designed to track the performance of an underlying index, such as the S&P 500, while others are designed to outperform the market.
GICs
Guaranteed investment certificates provide a guaranteed return on money you deposit for a specified time period. Terms range from 1 month to 10 years, and GIC interest rates are competitive with what you’ll get on a high-interest savings account. However, you typically can’t access your funds early without penalty.
Open an EQ Bank GIC
- Lock in a 3.5% interest rate on a 1 year GIC. To fund your high interest GIC, you’ll need to open an EQ Bank Savings Plus Account first.
Dive deeper: Our full guide to GICs in Canada
Hybrid bank accounts
Hybrid bank accounts combine the high interest rate of a savings account with the easy access to funds and other perks of a chequing account. They allow you to earn interest on every dollar you deposit, but commonly come with a prepaid card you can use for in-store and online purchases. It’s also often possible to earn cash back on your spending.
Examples of hybrid accounts include the EQ Bank Personal Account, KOHO plans, the PC Money Account and the Wealthsimple Cash Account.
EQ Bank Personal Account
- Earn up to 3.50% interest on your balance for 12 months and enjoy no fees on everyday banking plus unlimited transactions and no minimum balances. Sign up online in minutes.
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T&Cs apply.
Registered accounts
Tax-free savings accounts (TFSAs) provides tax protection for your investment income, so you won’t have to pay income tax on any interest or capital gains earned from your investments.
Registered retirement savings plans (RRSPs) support tax-deductible contributions. You also won’t pay any tax on the income you earn from your RRSP investments and savings until you make a withdrawal, which will hopefully happen once you’ve retired and you’re in a lower tax bracket.
Which bank gives 7% or 6% interest on savings accounts?
At the moment, none. As of April 2025, the Bank of Canada’s policy rate is 2.75%, so savings account interest rates fall well short of the 6% or 7% mark. You can get promo rates of around 5%, but these only last for a limited period of less than 6 months.
So if you want to get a 6-7% or more return on your investment, you’ll need to consider other options. One option you might like to consider is investing in stocks.
As an example, the S&P/TSX 60 Index tracks the performance of large-cap companies on the Toronto Stock Exchange. As of April 2025, it had delivered a 5-year annualized return of over 11%.
So if you can find an index ETF or mutual fund that reliably tracks the performance of an underlying stock market index, you could potentially get better returns than you would from a savings account. Learn more in our guides to how ETFs work and ETFs vs mutual funds.
Check out our full guide to the best stock and ETF brokerage platforms in Canada
Closest alternatives to a 10% interest savings account in Canada
You won’t find a 10% interest rate savings account in Canada right now, so you’ll need to look elsewhere if you want the potential to generate such high yield.
Stocks and ETFs can offer higher rewards, but they also come with a higher level of risk. And while past performance is no guarantee of future performance, our guide to the best Canadian ETFs in 2025 shows that sizable returns are indeed possible.
For example, the five top Canadian ETFs on the TSX based on one-year performance delivered returns of 137% or more, while the five top Canadian ETFs on the TSX based on five-year performance delivered returns of 26% or more.
Cryptocurrency is also an option for investors chasing big returns. Crypto savings accounts and staking platforms sometimes promise yields in the double digits, but they come with plenty of risk attached. Cryptocurrency regulation in Canada is still being developed in Canada, and you don’t get the security of CDIC protection that you get with a savings account.
Related: Cryptocurrency staking guide
How to choose between a 5% savings account and other investment options
Is a 5% savings account right for you, or are you better off considering other investments? Ultimately, it all comes down to your savings goals, your financial situation and your appetite for risk.
Pros of high-interest savings accounts
A high-interest savings account is a simple and sensible choice. It provides a low-risk way to build your bank balance, and unlike other investments like stocks or property, there’s next to no risk of losing your money. Instead, all you have to do is sit back and let the power of compound interest work in your favour.
Savings accounts also come with the peace of mind of CDIC insurance. If you open a 5% savings account with a financial institution that is a member of the Canada Deposit Insurance Corporation (CDIC), up to $100,000 you deposit will be covered in the event that the bank fails.
Cons of high-interest savings accounts
But there are a few drawbacks of 5% savings accounts to consider too. For example, most high-interest savings accounts have variable interest rates, so if rates fall, your account’s interest earning power will fall too.
Some 5% savings accounts offer unlimited access, but others may come with monthly transaction limits. Exceed your monthly limit and you could be slugged with a fee.
You may also need to meet certain requirements to earn the maximum advertised interest rate, like depositing a certain amount each month or maintaining a minimum balance.
Finally, while savings accounts are safer than other types of investments, they don’t offer the same potential for high returns.
Tips to get the most out of your 5% interest savings account
Now that you’ve found the right 5% interest savings account for your needs, use the following tips to help you grow your balance faster.
Don’t dip into your savings
When you’ve got a big pile of money sitting in your savings account, it can be tempting to dip into it every now and then when you feel like splashing out. But withdrawing from your savings account is only going to set you back in the long run, so be disciplined. Keep your savings goal in mind and only dip into your savings when absolutely necessary.
Set up a recurring deposit
Automate your savings by setting up a recurring deposit each week from your chequing account to your savings account every time you get your weekly paycheque. This will ensure that a portion of your pay goes directly to savings before you have a chance to spend it.
Make a budget
Analyse your weekly spending to work out where every last cent of your income goes. Identify any areas where you can cut back — you could cancel your gym membership and unused streaming services, or look at dining out less. You can also consider the 50/30/20 rule, with 50% of your income going to essential expenses, 30% to entertainment and other fun stuff, and 20% to your savings.
Shop around
While your account may offer a great interest rate now, there may be a better rate available in the future. Every few months, take 10 minutes to do a quick review of current savings account interest rates. If there’s a higher rate available at another bank, don’t be afraid to switch.
Bottom line
Though 5% interest savings accounts were recently available in Canada, there currently aren’t any financial institutions offering such a high rate. But even though interest rates have fallen in recent times, it’s still possible to get an attractive rate of 4% or more on your savings balance. Just make sure you’re aware of any terms and conditions you need to meet to get the maximum rate, and compare a range of accounts before deciding on the best high-interest savings account for you.
FAQs about 5% to 7% savings interest rates in Canada
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