What is a High Interest Savings Account?

A High Interest Savings Account can take many different forms, but there is one characteristic that they all share: higher interest earned on balances than traditional bank accounts.  They typically don’t replace your regular everyday bank account, but  they’re useful to compliment them, offering a safe, accessible place to keep your money.

Why use a High Interest Savings Account?

There are many reasons:

• High Interest – These accounts earn more interest than the typical bank account.  Although rates have been hovering at historical lows, they still continue to provide higher rates than traditional savings accounts.
• Accessibility – Whereas with GICs, your money is locked away for a set time (from 90 days to 5 years), with High Interest Savings Accounts, you can access your money whenever you want. Also, short-term GICs (under 3 years) tend to have lower interest rates than High Interest Savings accounts.
• Portability – The nature of these accounts allows you to deposit directly from your traditional bank account with no limits on how small the deposit is.
• Safety – Banks are insured, meaning that this money is safe.