Compare bank interest rates
Searching for the best interest rates in Canada to grow your savings? Here’s how to find them.
A high-interest savings account (HISA) does exactly what it says on the tin — pays a high rate of interest on every dollar in your account, helping you reach your savings goals sooner. But where can you find the best savings account interest rates in Canada?
In this guide, we’ll show you how to compare bank interest rates and HISAs from other financial institutions to get the best bang for your buck.
How do interest rates impact me?
The way interest rates impact you depends on whether you have a savings account or a loan. These are the types of interest rates you’ll come across in Canada:
- APY. Annual percentage yield is the amount you earn per year on your savings. A high APY will help your savings grow faster year over year.
- APR. Annual percentage rate is the amount you pay on debt. A low APR will help you save money on your mortgages or loans.
What are the different types of interest rates?
Banks describe interest rates differently depending on whether they’re talking about savings accounts or loans.
Interest rates on savings accounts and chequing accounts, the APY, describe the amount of money the bank will give you to store your money in that institution. Interest rates on mortgages and personal loans, the APR, describe the amount you have to pay the bank for the money the bank lent you.
Here’s a breakdown of how interest rates work, depending on what type of financial product you’re looking at.
If you have a high-interest savings account, the interest rate will be variable. This means the financial institution that provides the account can raise or lower your interest rate in line with their prime rate, so the amount of interest you earn could vary from one month to the next.
If you invest in a guaranteed investment certificate (GIC) or term deposit, the interest rate will typically be fixed until the end of the term. This gives you the security of knowing you will get a guaranteed return on your investment.
But some GICs come with variable interest rates if you want to benefit from any potential interest rate rises.
Mortgages and loans
The interest rate that applies to a personal loan or mortgage depends on the type of loan you have: fixed or variable.
- Fixed-rate loans. These loans have an interest rate that stays the same for a predetermined period of time — this could be the full loan term or a shorter period such as five years. With a fixed interest rate, you get the peace of mind of knowing exactly how much your monthly repayment will be.
- Variable-rate loans. These loans have an interest rate that may fluctuate throughout the loan term. Banks adjust their prime rate based on the Bank of Canada’s policy interest rate, which changes throughout the year. This means you can benefit from lower repayments if interest rates fall, but you’ll be slugged with higher repayments should rates rise.
What’s the difference between APY and APR interest rates?
Knowing the meanings of the most common terms you’ll come across when making financial decisions can help you make the most of your money:
- APY. This is the good kind of interest. APY stands for annual percentage yield, and it’s the amount of interest that gets paid to you each year. To earn the most money, look for savings accounts and investments with a high APY.
- APR. This is the bad kind of interest. The APR is the amount of interest you have to pay each year on your debts, for example your mortgage. To save the most money, look for loans and credit cards with a low APR.
Why it’s important to find the best savings account interest rates in Canada
The higher the interest rate, the harder the money in your savings account works for you. And while a small difference in interest rates might not look like much on paper, it can make a big difference to your bank balance over the course of several months or years.
Let’s say you’re saving for a deposit on a home. You have $5,000 already, and you’re going to deposit $100 of your paycheque into a HISA every week. As you can see in the table below, an interest rate of 5% instead of 4% will help you save an extra $429 over the course of 3 years.
|Savings account 1
|Savings account 2
|Balance after 1 year
|Balance after 3 years
Types of savings account interest rates
When you’re comparing bank interest rates on savings accounts, it’s important to be aware that different types of interest rates may apply. These include:
- Bonus interest rate. Some savings accounts pay a base rate of interest, but allow you to earn bonus interest every month that you meet specific requirements. For example, you may be able to earn bonus interest if you deposit $200 into your account each month.
- Introductory interest rate. Some banks offer promotional interest rates to attract new customers. These high promo rates apply for a limited introductory period, such as six months, before the account reverts to a lower standard rate.
- Tiered interest rate. Some high-interest savings accounts have tiered interest rate structures — the higher your balance, the higher your interest rate. The thing to remember with this type of account is that you might not always qualify for the highest advertised rate, so it’s important to read the fine print.
Bank savings accounts promos on now
Special offers and high introductory interest rates can be a great way to boost your savings balance. Here are a few offers available now that have caught our attention:
- Earn up to 5.00% interest
- Earn cashback rewards
- Get a prepaid card
- Unlimited free transactions
- No minimum balance required
- CDIC protection for balances up to $100,000
- Earn up to 4% interest for 12 months
- Unlimited & free transactions
- $0 account fee
- Zero everyday banking fees
- No min. balance requirements
- CDIC protection for balances up to $100,000
- No monthly fees
- Free and unlimited day-to-day transactions
- Free and unlimited Interac e-Transfers
- No min. balance required
- CDIC protection for balances up to $100,000
Compare savings account interest rates
Where can you find the best savings account interest rates in Canada? Check out the table below for details of the savings accounts on offer from the Big Six banks as well as challenger banks, fintechs and credit unions.
|Standard interest rates
|BMO Savings Amplifier Account
|CIBC eAdvantage Savings Account
|Up to $9,999.99: 0.65%
$10,000 – $24,999.99: 0.85%
$25,000 – $99,999.99: 1.5%
$100,000- $499,999.99: 1.7%
$500,000 and over: 1.9%
|National Bank High Interest Savings Account
|RBC High Interest eSavings Account
|Scotiabank MomentumPLUS Savings Account
|TD ePremium Savings Account
|Up to $9,999.99: 0%$10,000 and over: 1.85%
|EQ Bank Personal Account
|Motusbank High Interest Savings Account TFSA
|Neo High Interest Savings Account
|Simplii High Interest Savings Account
|$0 – $50,000: 0.4%
$50,000.01 – $100,000: 0.4%
$100,000.01 – $500,000: 0.65%
$500,000.01 – $1,000,000: 1.25%
$1,000,000 and up: 5.50%
|Tangerine Savings Account
|Wealthsimple Spend & Save
|$1 – $999,999: 4%$100,000 – $499,999: 4.5%$500,000+: 5%
|Achieva Financial Daily Interest Savings Account
|Alterna Bank High Interest eSavings Account
|Coast Capital High-Interest Savings Account
|Vancity Jumpstart High Interest Savings Account
The impact of interest rates on mortgages
When interest rates rise, you pay more on your monthly mortgage repayments. On the flipside, you’ll end up paying less each month if rates fall.
The key interest rate you need to monitor is the Bank of Canada’s policy rate, which is adjusted eight times per year. This is the benchmark rate lenders use when setting interest rates for their mortgages and other loans, so changes to the policy rate are usually soon reflected in home loan rates.
To give you an idea of the impact of interest rate changes in the real world, let’s look at an example. If you have a $500,000 mortgage with a 30-year term and an interest rate of 6%, your monthly payment will be $2,998. But if your interest rate increases by 0.25%, your monthly payment will rise to $3,079 — that’s an extra $81 per month.
How is interest charged on different financial products?
Interest works differently depending on the type of product you have:
Savings accounts work differently from credit accounts because the interest rates earn you money rather than cost you money. All savings accounts come with a variable base rate, with interest typically calculated daily on your balance and paid into your account monthly.
This is referred to as compound interest: the interest payments you earn then go on to earn their own interest. Guaranteed investment certificates (GICs) and other savings options work similarly, though most GICs offer fixed interest rates.
Credit cards come with variable annual interest rates. Rates vary depending on what features the card offers, but the average card falls somewhere between 15% and 22% APR. If you have excellent credit, you can qualify for a lower rate. If you have a low credit score, expect to pay on the higher end of that spectrum — or more.
There are two types of interest rates on a credit card: purchase rate and cash advance rate. The purchase rate is what you’re charged when you make purchases on the card, and the cash advance rate is what you’re charged when you withdraw cash at an ATM using the credit card. Credit cards can also offer special interest rates such as introductory 0% rates or balance transfer rates.
Personal loan interest rates can be fixed or variable and are annual rates. The interest rate you qualify for will depend on factors such as your credit score and credit history, your income and any existing debts you may have. The lender will also take into account the size of the loan and the loan term when setting your interest rate.
Mortgage interest rates can also be fixed or variable. Fixed interest rates are guaranteed not to change, whereas variable rates may fluctuate.
The interest you’re charged will generally be calculated daily. Mortgages can either be principal and interest — meaning you’re repaying both the interest you’re being charged and the original amount you borrowed — or interest-only. With the latter, you’re only repaying the interest accruing on your debt for a set period, such as five years, before the loan reverts to a principal and interest mortgage.
How should I compare bank interest rates?
Keep the following in mind when searching for the best interest rates in Canada:
- Shop around. Don’t just settle for the savings account offered by your regular bank. Shop around to compare a range of HISAs from traditional as well as challenger banks — you might be surprised by just how much more you could be saving
- The actual rate. Look at how competitive the interest rate is when comparing. The higher the savings account interest rate you get, the quicker you’ll be able to grow your bank balance.
- Fees. Check for any fees that the account or loan has, including upfront and ongoing fees. If you find an option with a competitive interest rate but high fees, calculate whether it’s still the best option.
What affects the interest rate I get on a loan or credit card?
There are also several factors that can affect the rate you get when you take out a loan or credit product. These include:
- Your credit score. Lenders will assess your credit history and credit score to determine if you’re a reliable borrower. Taking steps to improve your credit score can help you qualify for a lower rate.
- Your income. Lenders often have minimum monthly income requirements that you must meet to show you can make on-time loan repayments. A larger income can help you qualify for a lower rate.
- Your employment. If you’ve held down a full-time job for six months or more, you can demonstrate to lenders that you earn a steady income.
- Your existing debts. Lenders will consider your debt-to-income ratio when assessing your ability to make loan payments.
- NSF transactions. Zero NSF transactions on your bank account will help you qualify for a loan and access a lower rate.
While comparing interest rates across products is a good idea, make sure the products you’re comparing are similar. For example, if you compare a rewards credit card to a low-rate credit card with no added perks or features, their interest rates will be quite different.
Compare high interest savings account interest rates
What are negative interest rates?
One financial policy idea that emerged from the Global Financial Crisis, and again made waves at the height of the pandemic, is implementing negative interest rates. A negative interest rate is an interest rate of less than zero, and the idea behind negative rates is to stimulate a stagnant economy.
Negative interest rates are incentives for banks, encouraging them to lend out their reserves rather than deposit them with central banks and be charged interest. The theory is that this will in turn encourage consumers to borrow more money.
Switzerland was one of the first countries to implement NIRP in the 1970s in an attempt to deter a flood of foreign investment. Following the 2008 recession, Sweden was the first country to begin implementing a negative interest rate, while the European Central Bank (ECB) adopted such a policy in 2014.
A negative interest rate could be a way to stimulate the economy, but so far it isn’t something we’ve tried out in Canada. Economists are divided over whether or not it would be a good idea — it would encourage spending and inject cash into the market, but it would also make it more difficult for people to save.
Looking for more information about interest rates? Check out these helpful articles below:
Bank interest rates have a big impact on how much you can save with a savings account and how much your monthly mortgage payment will cost. Compare savings accounts to find the best interest rates in Canada, and make sure you understand how interest rates work before deciding which account or loan is right for you.
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