2. What are the account fees?
Some high-interest savings accounts charge transaction fees, usually a few dollars per withdrawal, transfer or bill payment that comes out of your account—that can really add up. It is less common for these accounts to charge a monthly fee, because they’re intended for storing your money over a longer period of time. However, some banks or financial institutions require account holders to maintain a minimum balance in order to avoid paying these monthly fees.
Other savings accounts, like those available at Simplii Financial, charge zero fees for your transactions and have no minimum balance requirements to worry about.
3. Is the account eligible for CDIC insurance?
Before you open a new account, check if the bank is a member of the Canada Deposit Insurance Corporation (CDIC). If it is, CDIC will protect your savings of up to $100,000 in eligible accounts if the member institution becomes insolvent (extremely rare, but not impossible).
Traditional banks and credit unions aren’t the only financial institutions that are CDIC members—many digital banks are, too. Deposits in Simplii Financial’s High Interest Savings Account*, for instance, are insured by the CDIC. National research firm Ipsos recognized Simplii as offering the best value for money and an excellent mobile banking experience, as well as being one of the most recommended financial institutions of 2022.
Another reason to open a high-interest savings account
You might be asking, “Do I really need another bank account?” In addition to the reasons above, having a HISA can help you separate your everyday spending from the money you’re saving towards a financial goal, such as taking a trip, paying for tuition or adding to your emergency fund. You can set up automatic transfers from your chequing account to your HISA once a month or after each payday, for instance. It’ll feel rewarding to watch the balance grow.
If you’re saving up for something, figure out how much you’ll need to pay for it. Then, calculate how much money you can set aside each month by subtracting your expenses from your income. (Quick tip: Next time you log in to your online bank account, export your recent transactions into a spreadsheet.) Now, divide the cost of your future purchase by the amount you think you can save each month to see how long it will take to hit your target. If you’re saving for a vacation or a down payment for a home, this will help you create a realistic timeline that shouldn’t put you into debt.
A high-interest savings account is a great option to save up for a financial goal or to give yourself the added peace of mind of having an emergency fund. (Have a goal and want an emergency fund? Open more than one HISA.) Be sure to look into the different account features and welcome offers available to help yourself decide where to park your savings.
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