While I have credit cards with most major financial institutions, I don’t bank with them. Why? Because they are so many better alternatives. The best high interest savings accounts in Canada are not with the major banks – their rates are very poor. There are three alternative options that I use and recommend. The best savings accounts should have a great interest rate with no requirements – no minimum balance, no direct deposit requirements, and no online account or monthly fees.
Best High Interest Savings Accounts in Canada
1. EQ Bank – 2.3% Interest + $25
The EQ Savings Plus account is one of the best in Canada. In addition to having a fantastic rate, it also functions as a checking account.You get 5 Free Interac E-Transfers a month, and unlimited transactions including EFT (Electronic Funds Transfer) to your other bank accounts. This high interest savings account offers a consistent 2.3% interest rate.
It’s not a promotional rate, so it’s a great account to keep long term. In addition, you can earn an additional $25 bonus if you are a new client until October 31, 2017 when signing up. EQ Bank ran the same promotion last May. Once your account is set up, you will receive a welcome email. You must reply with the promo code REF021476980095 before November 15 to get the $25 bonus that will post within 5 business days. My welcome email looked like this:
2. Tangerine – 2.4% Interest + $50
People either love or hate Tangerine. I love them for a variety of reasons, one being that they are the best virtual bank with a ground presence. This is because Tangerine is owned by Scotiabank, which means you can access their ATMs free of charge. As well, this also means that you can also use Scotiabank’s international banking partners to avoid foreign ATM fees.
When you sign up for a new Tangerine checking account and use Orange Key 44499869S1, you can earn an additional $50 bonus by depositing $100 in your account. This may also stack with an additional $100 payroll bonus. By signing for a savings account as well, you will earn 2.4% for the first three months the account is open.
The everyday rate at 1.0% isn’t great, but Tangerine has targeted promotions every quarter with really good rates. This quarter, I got selected to earn 2.75% interest until the end of the year. Last quarter, they were offering up to 3.21%.
3. DUCA Credit Union – 2.75% Interest + $50
DUCA is a Credit Union in Ontario. They recently launched a promotion where you can earn 2.75% Interest on new deposits into their Earn More Savings account. This is the best publicly available interest rate on a savings account with no minimum balance, as both new and current members are eligible. This promotional rate runs until December 14, 2017.
DUCA is also currently offering $50 for new members signing up. You will earn $50 deposited into your account within 90 days of joining, and also get to select a charity that DUCA will donate $50 to, which is a nice touch. Signup for a new account here, and enter my information in the referred by box.
Along with DUCA, there other provincial credit unions often offer rates that are as good or better than national financial institutions, so if you bank with a credit union, you should always keep an eye out for these promotional rates. All credit unions should have deposit protection that likely is organized provincially. In BC, all credit union deposits are protected with no limit.
All deposits in Canadian financial institutions are guaranteed by CDIC (Canadian Deposit Insurance Corporation), for deposits in Canadian currency up to $100,000 per bank. This is enough assurance for me, and so all my interest is free money. None of these accounts have monthly fees and minimum balances, and I use them for my rainy day fund. I get that people may not want to move money around accounts, but it at most takes me most 20 minutes every few months. That’s a pretty good return.