A high interest savings account (HISA) is one of the simplest and safest ways to grow your money in Canada. With rates significantly above what traditional big bank savings accounts offer, a HISA can mean hundreds of extra dollars per year in interest on a meaningful balance.
This guide covers everything you need to know about Canadian HISAs: how they work, what rates to look for, which institutions offer the best deals, and how to choose the right account for your financial goals.
A high interest savings account is a deposit account that pays a meaningfully higher interest rate than a standard savings account. While traditional big bank savings accounts often pay 0.01% to 0.10%, HISAs at online banks and credit unions in Canada regularly offer 3% to 5% or more, especially for promotional periods.
Your money remains fully liquid — you can withdraw or transfer funds at any time without penalty. This distinguishes a HISA from a GIC, which locks your money for a fixed term.
Interest is calculated daily on your closing balance and paid monthly. The rate is variable, so your institution can adjust it at any time. Most HISAs have no minimum balance requirement and no monthly fee, making them accessible to everyone.
Canada Deposit Insurance Corporation (CDIC) insures eligible deposits up to $100,000 per depositor per member institution per deposit category. Most HISAs at Schedule I and II banks are CDIC-covered. Credit unions have equivalent provincial insurance — often unlimited coverage in provinces like Ontario and BC.
A HISA is a product type; TFSA and RRSP are tax wrappers. You can hold a HISA inside a TFSA so interest grows tax-free, or inside an RRSP so it grows tax-deferred. For most Canadians with unused TFSA room, holding a HISA inside a TFSA is the smartest move. The 2025 TFSA annual limit is $7,000.
Interest earned in a non-registered HISA is fully taxable as income each year. Your institution will issue a T5 slip if you earn over $50. To minimize tax, always max your TFSA first before keeping savings in a non-registered HISA.
HISAs are ideal for emergency funds (3–6 months of expenses), short-term goals like a vacation or car purchase, and parking cash while deciding where to invest. For long-term wealth building, diversified ETF investments typically outperform savings rates over 10+ years.
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