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.