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High Interest Rate Savings Accounts

Update: Online bank ING Direct (read my ING Direct Review) offers a competitive interest rate along with a $25 bonus directly into your account when you register with an “orange key” code Note that the bonus requires a minimum deposit of $100 with the initial registration cheque.

Get the latest Orange Key Referral Code

I’m a HUGE fan of the high interest rate savings accounts, especially those with no fees. Of all the accounts that I have reviewed, my pick is the PC Financial Interest PLUS Savings account. This account requires an account minimum of $1000 but gives you a competitive interest rate + anniversary bonuses. Don’t confuse this with the Interest First savings account, as the interest is slightly lower. This account does have its advantages however as it doesn’t require a minimum balance of $1000.

What I like about PC Financial is that everything is FREE (more free financial stuff here). Being as frugal as I am, I love free. :) I have a chequing account with them also and the cheques are free with no minimum balance. There is also no charge to transfer money between banks. For example, my main chequing account is with CIBC, so I Pay Myself First every two weeks, which goes directly into my PC Savings account. This can be programmed to withdraw automatically every two weeks and it works wonders.

If you don’t currently have a high interest savings account, there is a comprehensive review on most of the high rate savings accounts available in Canada on RedFlagDeals.com. The review includes a field that will calculate the interest on your savings balance. It’s a great function which will help you decide which savings account to go with.

After surfing through some of the savings accounts information pages, listed below are the current interest rates. I’ve also included direct links to each of the institutions in case you want to do further research. I don’t have any experience with ICICI bank, but it seems that they are extremely competitive with their interest rates and often on top of the pack.

Here is a list of some of the more popular high interest rate savings accounts available to Canadians (sorted by highest rate):

Rates updated as of July 28, 2009

  1. Achieva Financial: 1.85%
  2. Outlook Financial: 1.50%
  3. ICICI Bank: 1.40%
  4. ING Direct (ING Direct Review) 1.20% (use orange key code (click here for code) for $25 bonus – requires deposit of $100 with initial cheque)
  5. Manulife Bank: 1.10%
  6. Citizens Bank: 1.00%
  7. PC Financial Interest PLUS: 0.75% + annual bonus
  8. Altamira: 0.75%
  9. HSBC: 0.75%
  10. RBC High Interest eSavings: 0.75%
  11. E-Trade Cash Optimizer Account: ?

The biggest downside of these accounts is that interest is 100% taxable. This means that my savings of 26k earning 4% = $1000/year interest that will be taxed at my marginal tax rate. Boo on that. Perhaps it would be more efficient to move some of my savings into my investment account and purchase some dividend paying stocks.

(Update: With the new Tax Free Savings Account (TFSA), these high interest rate savings accounts will be able to grow tax free.  As of Nov 2008, here are the TFSA choices.)

Also note that these accounts are insured by CDIC which insures the account for up to $100,000.  If you have more than $100,000 cash, you may want to put the money into a discount brokerage account instead where the cash will be protected up to $1,000,000.

Confused about all the tax talk? Stay tuned, i’ll post later about How Canadian Taxes Work.

If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).

FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 119 comments… add one }
  • Avatar Decker January 11, 2007, 10:36 am

    I am getting a whopping 5.05% return on a saving account I got through American Express when I got their AMEX One card (which deposits 1% of everything I charge into this account). When I got the card and made my first charge they deposited $35 into the account. My year anniverary just came and they unexpectedly deposited a $25 anniversary “bonus” into my account. I am able to transfer funds directy into it from my B&M checking and savings and of course schedule automatic transfers. Seems to good to be true and I’m wondering if the return rate will lower at some point.

  • Avatar canadian dollars January 11, 2007, 10:58 am

    Decker: Can you tell us more about the AMEX One card 5.05% return deal?

    FT: While the taxation on the interest portion of your savings is bad, throwing all that money into dividend paying stocks might be better but comes at a significantly higher risk. Ya, I know, again I’m preaching to the choir :)

  • Avatar FrugalTrader January 11, 2007, 11:12 am

    I believe the AMEX deal is available to US residents only. Our neighbors down south get higher rates b/c their prime is higher.


  • Avatar Decker January 11, 2007, 11:28 am

    Here’s the info on the One card and the high yield savings account: https://www124.americanexpress.com/cards/loyalty.do?page=one

    I am at work now, so only scanned the info, but didn’t see if this is limited to US customers only. It might be hidden in the fine print. This material says that account yields 5% interest. I thought I was getting %5.05, but either way, I like it.

  • Avatar Canadian Money Blog Reviewers January 12, 2007, 8:49 am

    FT: why haven’t you moved all your banking to PCFinancial? I’ve just completed that move recently and it saves me from having to keep a minimum balance at another bank. That money is instead stored now in the 4% account at PCF :-)

  • Avatar FrugalTrader January 12, 2007, 9:02 am

    Hey CMBR,

    Thanks for the suggestion. I have considered that move, however, I like keeping a relationship with one of the big banks as I find that they do me “favours” for keeping business with them. For example, they give me preferential rates on LOC’s, mortgages.

    But you’re right, those minimum balances required really tick me off. I’m actually considering moving my self directed RRSP to Questrade. Lower fees and no min balance.


  • Avatar canadian dollars January 13, 2007, 10:05 pm

    I keep one big bank account as well. The rationale being that if I need to withdraw say 10,000 or something large, I can do so without having to go to the bank machine 10 times on 10 separate days. So like Frugal Trader stated, I do it because of the minor benefits it brings.

  • Avatar Canadian Money Blogs Reviewer January 13, 2007, 10:36 pm

    canadian dollars: just to be silly, I’m tempted to ask you: what are your 10000$ doing in your regular bank account? :-)

    I understand though that sometimes it might be easier to have access to a real bank. Is it worth having to keep a minimum balance though?

  • Avatar canadian dollars January 13, 2007, 11:35 pm

    I don’t actually have 10K in my regular bank account. I keep it in my PCF account. What I’m saying is if I need to withdraw large amounts of money I’ll transfer from PCF –> big bank and then withdraw from the bank when I need it :)

  • Avatar Jon Lee March 15, 2007, 8:17 pm

    I opened a PCF savings account alongside my CIBC account. I think its important to have a brick and mortar bank though – there are many things that PCF cannot do like EMT and wire transfers.

    In hindsight, I wish I hadn’t gone with CIBC – so I would have access to no-free cash withdrawals at 2 different ABMs!

  • Avatar djstef April 6, 2007, 7:42 pm

    Is anyone here in Quebec and using the PC High Interest Savings account and/or the No Fee’s banking from PC ?

    I’m spoke to them on the phone, and the only thing seems that we can’t apply online, I must go to Cornwall (the closest branch) and apply in person.

    Has anyone done this?

  • Avatar Canadian Money Blogs Reviewer April 7, 2007, 12:30 pm

    djstef: I would try to call the Cornwall branch directly. I know somebody from Quebec that was told it was ok on the phone but they did need an Ontario address when they got there in person!

  • Avatar djstef April 9, 2007, 2:41 pm

    I called the branch in Cornwall today, and told them I want to come in and open a bank account and saving account, and I’m from Quebec. The lady said it is not a problem, you neeed some ID’s when you go, she even started to fill in the forms over the phone with my address so it’ll go quicker when I get there. So looks like it can be done now for people in QC, I’m driving out on Wednesday!

  • Avatar djstef April 12, 2007, 11:05 am

    Just an update to anyone in Quebec thinking of using PC Financial, it can be done, I was there yesterday (less then an hour drive to Cornwall) and opened a no fee chq account and high interest savings account. The only limit right now in QC is that we can not have any credit products (such as line of credit or overdraft) but they’re working on that. Anyway, I’m excited cuz I have the accounts now and will be starting my no fee banking!!

  • Avatar Roc April 13, 2007, 6:51 pm

    Before opening up a high interest savings account, you need to consider how the interest is calculated.

    Achieva offers 4.10% interest compounded monthly, while Steinbach Credit Union offers 4.20% paid annually. Which is the better deal?

    Answer: Achieva is the better deal. Since Achieva pays interest monthly, then this interest carries forward to the next month which intern earns interest. Your essentially earning interest on top of interest. While Steinbach pays more interest, it does not pay interest on the interest earned each month.

    Therefore I’m currently earning over $1,200/month interest on my $365,000.00 savings account with Acheiva, which then earns interest on top of interest!!!

  • Avatar FrugalTrader April 13, 2007, 7:02 pm

    Roc: 4.1% compounded monthly on your $365,000 = 365,000(1+4.1%/12)^12= $380,249.44 after one year

    4.2% compounded annually = 365,000 x (1+4.2%)^1= $380,330 after one year

    The Steinbach Credit Union is a better deal on an annual basis. But I guess it depends if you need monthly income from your savings or not.

  • Avatar Roc April 17, 2007, 9:52 pm


    I did some research on Steinbach Credit Union and was wondering if you can provide some information on their high interest savings account.

    Steinbach pays 4.20% on balances

  • Avatar Darkman May 8, 2007, 8:47 pm

    Not a bad deal currently offered by HSBC

    It’s not there regular one .. but a virtual one as well – HSBC Direct account:

    Paying 3.50% .. but very flexible .. unlimited withdrawals, bill payments, etc..

    No checks .. but can provide links with other banks and transfer money back and forth as well..

    PCF’s regular account is where from i pay my bills etc .. but the interest is low in it.. – i maintain around 5,000 there .. and it’s only 0.10 or 0.15% nawadays..

    3.15% sounds better.. – i think i will keep about 1,000 in PCF daily (have there savings 4.00% also, btw, as well as Achiva’s 4.10% .. as well as E-trade’s 4.15% :)) .. and other 4,000 i will give to this HSBC Direct ;)
    4,000 x 3.5% = $140 a year…
    So pretty good rate will be earned .. on a flexible account, where i can deposit / withdraw as much as i want at the ATM.. pay all my bills etc (btw – HSBC ATM machines, as well as Bank of Motreal ones, and as well as National Bank ATMs, are considered with HSBC as your “home” machines.. and no interac fees are changed if using them (as well as as mentioned Free withdrawals)

    If open bank account with them .. for limited time only (by already extended by the way) – one gets Bonus / Present of $25, deposited in account in a couple of months, if $100 balance or more is in the account on the specified future date :)

    Live CSRs are available over tall free phone numbers 24/7 (as PCF used to be in the beginning – currently PCF cut those hours down for LIVE CSRs)

    From their web site (provided above) :

    “It pays to be direct.™

    FREE, unlimited electronic deposits, withdrawals, transfers and bill payments within Canada

    High interest rate of 3.50% (1)

    24/7 ACCESS online, by phone and at 4,100 Cash machines (5)

    The HSBC account is notable because of how user-friendly it is. Though you can’t access it through HSBC branches, you can deposit cheques or make no-fee withdrawals through a network of 4,100 bank machines (HSBC, Bank of Montreal and a network called The Exchange), and you get free bill payments.

    Rob Carrick, The Globe and Mail
    March 29, 2007”

    That “The Exchange” Network. – some institutions belong to it or something.. and there is a sign at the ATM indicating this.. – That is why i mentioned National Bank, cuz was told by CSR that, in Winnipeg anyhow, National Bank is a part of that network.. and their ATM machines accordingly are a “home” machines for HSBC…

    I already applied for their account few days ago.. and now in process of getting the welcome package from them.. and ATM card :)

  • Avatar Elizabeth July 11, 2007, 10:22 pm


    If I would like to open an online account in hsbc direct u.s., do i have to be the resident of U.S.?? I am a resident of Canada

    Thank you

  • Avatar Chris August 14, 2007, 12:08 pm

    Didn’t you forget EmigrantDirect.com?
    They’re currently at 5.05% for a $1 minimum savings account.
    I’m not sure if you can take advantage of it in Canada, but I know we can here in the US.

  • Avatar Austin September 19, 2007, 9:56 pm

    I’m currently the higher {actually only}earning partner in the relationship.

    Would opening the P.C Financial account in my spouse’s name alone save me from the painful losses of my earned interest to taxes??

  • Avatar Chris September 20, 2007, 10:22 am

    I don’t know about a way to get around the 100% taxation on the interest in Canada.
    I do know that in the USA, if you and/or your spouse has earned interest, you have to pay your marginal tax on the amount of earned interest.

  • Avatar Austin September 28, 2007, 8:03 am

    Thanks Chris for ur response, I appreciate.

    I may go with the Market Indexed RRSPs offered by the proffessional body to which I belong.

    I was a bit questioning about continuing with that when I made a direct comparison b/w my ROI (3.6% over the last year) and the above 4.5% being offered by P.C Financial.

    But looking at it closer now, i think I win with the MIRRSP’s b/c my 3.6% capital gains is tax exempt and that beats 2.25% (capital gains of 4.5% after marginal tax of 50% has been applied)

  • Avatar may November 4, 2007, 9:42 pm

    If you wanted to put 100,000 into a saving account which one would you put it in? im having trouble

  • Avatar FrugalTrader November 4, 2007, 10:34 pm

    May, I currently have around $100k in my PC Financial account. The big thing to look out for is CDIC coverage. I believe all of the listed savings accounts have this coverage which insures your money up to $100k. Looking through all the savings accounts, looks like ICICI has the highest rate.

  • Avatar Myself November 5, 2007, 11:56 am

    Why they heck is there a CDIC (or in the US, FDIC) insurance up to $100,000.
    Why isn’t it a little higher (say $200,000)? Especially since there are many millionaires in the world today.
    It must from from an actuary I’m guessing who worked out the numbers and that’s what they came up with?

  • Avatar FrugalTrader November 5, 2007, 1:19 pm

    Myself, yes, it’s a pretty low number. It’s basically what they cover in case the company that’s holding your account goes belly up. If you have any more than $100k, it would be best to put it into a brokerage account where they will insure your account up to $1 million.

  • Avatar natalie November 6, 2007, 7:20 pm

    i’m living in smiths falls, is there any achieva financial in this area?

  • Avatar Nadine December 14, 2007, 5:35 pm

    Hi there!

    I need help!

    I currently have a Canada Trust GIC (which makes pennies); It’s pointless. I also have a ING direct account, and a Canadian saving bonds account.
    I am interested in getting a Achieva account seeing how they are offering 4.35% which is amazing. Does anyone know much about this company?

    Thanks in advance.

  • Avatar DAvid December 16, 2007, 2:08 pm

    A number of financial institutions are offering high interest accounts. Have a look at the financial calculators at Dinkytown.net to gain an understanding of how different interest rates would affect your income. Also remember, savings accounts should be a short term investment, as other forms of investment are taxed at more favourable rates.

    You may wish to take a walk around the financial district of your city, and see what the competition is offering. TD Bank has GIC products with interest rates of 4.2% currently. Once you are armed with the knowledge of what the competition offers, a long chat with the manager at your current bank, should gain you a better rate, else you will have learned where to move your money.

    I am a strong believer in doing business with the institution that gives me the best package of services, rather than having accounts scattered across many. One of these services includes the ability to meet with a member of their staff to discuss options to best meet my needs.

    You can learn more about Achieva at their website.


  • Avatar Ivan December 18, 2007, 10:02 pm

    I am not excited about 4.5%. Just have a look at these rates: http://www.vtb24.ru/en/personal/savings/deposits/term-deposits/profit/
    The bank has BBB+ Fitch rating, 77.5% controlled by the government, savings are insured. Non-government (100% private but very good) banks normally offer even better rate. Not sure if they open accounts for non-residents though (I have Russian passport).

  • Avatar Ivan December 18, 2007, 10:19 pm

    Forgot to mention that this is Russian bank ).

  • Avatar Financial Imbalance January 7, 2008, 9:29 am

    Achieva Financial just dropped there rate down to 4.10%. I have been using them and have been pleased with my experience thus far.

  • Avatar FrugalTrader January 7, 2008, 3:13 pm

    Thanks for the heads up. I just updated the entire list, some changes to interest rates with Citizens bank being the the only one increasing their rate.

  • Avatar nancy (aka money coach) February 2, 2008, 4:47 am

    Citizens Bank of Canada – usually one step ahead of ING, no minimum, no hidden strings etc., plus, they donate their profits back to the community since they’re owned by a credit union. It’s a virtual bank so you need to be comfortable with online banking (I can’t imagine bloggers being anything but!)

  • Avatar Gean Oliveira February 19, 2008, 4:06 pm

    Hi FT,

    I was checking the RBC rates and right now they’ve dropped to 3.50%.

  • Avatar anthony February 27, 2008, 5:42 pm

    I have money with ICICI bank,,,which I just moved there from ING.
    It currently pays 4.1%

    They pay the highest rate i could find..it changes from time to time,like the others do, but basically its always at the top of the list.
    I also got a 1 year gic from them at 4.65% for my mother.
    She like the safety of gic’s.

    I keep my loose money there,,,i keep some for paying bills in CIBC,

    I have a wood gundy account but am looking for the best DISCOUNT BROKER, at this time,,,any suggestions would be appreciated.

  • Avatar James February 28, 2008, 8:22 am

    Any thoughts on the Bradford & Bingley savings accounts? It says that these accounts are for NON-UK members only. They have a number of them but these seem to be of interest to me: eSaver (6.25%) with only 3 transactions/yr or eIncome (5.8%.



  • Avatar steven April 1, 2008, 7:05 am

    hey i have a high interest accound with scoita there money master account but the interest is only 2.75% what bank would offer me the best interest paid monthly and have access to my savings incase i need them???

  • Avatar JohnnyCanuck April 8, 2008, 7:47 pm

    FYI…PC Financial recently lowered their interest rate from 4% to something like 3.8% or 3.2%. I can’t remember what the rate is now, but after my fiancee told me that the new posters are advertising a lower rate I called and they confirmed that they had lowered their rate. It’s still great to get free banking, but it ticks me off that they didn’t grandfather me or at least call or send a letter telling me.

    There may be a lot more competition now.

  • Avatar DAvid April 8, 2008, 11:35 pm

    3.35% if you have over $1000 in the account, then a sliding scale to 3.6% if you have over $100,000 in the account. They offer 2.5% on balances less than $1000.

    As for grandfathering, I don’t understand why you’d expect that in a savings account – GIC’s would give you certainty of interest rate until renewal — savings accounts will vary from time to time as described in the fine print provided by your bank. As a matter of fact on the PC Financial site, the fact that ‘rates are subject to change’ is in normal print at the bottom of the page.


  • Avatar Wise Saver April 16, 2008, 1:21 pm

    You should update the rates on here. It seems to me that ING Direct has one of the better rates all the time and I think they started it all. Some of the others increase their rates to get you in and then lower them. Not cool.

    • Avatar FrugalTrader April 16, 2008, 1:52 pm

      Thanks for the reminder, just updated the list. Although ING has raised from the bottom of the list of rates, it’s still in the middle of the pack. I personally lean towards PCF.

  • Avatar DAvid April 17, 2008, 12:28 pm

    You might wish to link to either of these sites which are maintained regularly rather than re-visiting this post and updating your table!



  • Avatar Susan April 21, 2008, 6:10 pm

    PC Financial regarding over draft protection. If you require overdraft protection and just started with a new company or line of work, to switch financial establishments immediately to either Royal Bank, TD, Scotia etc. As PC Financial will not set you up with overdraft protection if you are not past your 3 month probationary period. Ha! Because your also on probation with the bank too- even though you as a customer put thousands of dollars into the banks hands every year! I will be interviewing with other institutions this week regarding the same matter and or if they have exceptions for customers over 5 years with great track record.

  • Avatar W D W June 21, 2008, 9:57 pm

    im lookin for the easiest way to dodge tax-man in canada… im just waitin on my 30-60k inheritance… i need a way (paid mthly of course due to bills that need attention) to make money! i was lookin at PCF but since were taxable to rat sh*t… how do i do this up?

    and on a seperate note, what would the interest rate be mthly on that aproximate amnt?

  • FT FrugalTrader June 21, 2008, 10:07 pm

    WDW, if you were to place, say $50k, into a PCF account earning 3% interest, you would get approximately $125/month or $1500/yr. Depending on your marginal tax rate, say it’s 35%, you will be taxed $525 which means a net return of $975.

    Depending on your province and income level, you may want to look at dividend paying stocks for the income and tax efficiency. If you don’t need the “income”, then the most tax efficient solution would be to pay down your debt directly.

  • Avatar Amit in Vancouver Canada July 25, 2008, 7:23 am

    I have both ING Direct and ICICI accounts, and my regular brick-and-mortar bank is TD Canada Trust (mainly because I am lazy, and like the ability to walk into the bank at 7:55PM and do my banking at that hour).

    Some more benefits of ICICI bank are they offer the best forex rates if you have to transfer money out of Canada. Too bad, they only offer this to only 3 countries right now, but I had to transfer money to India last year in an emergency situation. Compared to TD Canada Trust, I saved around $500 by using ICICI on a $6000 transfer, TDC wire transfer rates are really bad. That’s a saving of 8.33%.

    I love ING too and have been their customer since 1999. I must add that ING USA has a much better website than ING Canada. There are many features available in ING USA that are missing from ING Canada. For last 4 years since I immigrated to Canada, I still haven’t seen ING Canada adopting these.

  • Avatar johnrigley July 29, 2008, 2:10 pm

    my wife and myself have been running a small post office village shop in the uk for the past 12 years we will be returning to canada after the shop is sold . with close to a million $ cash to purchase a home perhaps half that amount iam 69 my wife 64 the remainder will make up retirement income how should it be invested

  • FT FrugalTrader July 29, 2008, 2:23 pm

    johnrigley, “how” your money should be invested should be consulted with a financial planner. A couple things you have to think about, after you house is paid for, will you have enough cash to live on? Do you have any other income? What kind of expenses will you face?

  • Avatar Julie September 16, 2008, 3:45 pm

    Hi – thanks so much for the review of the online savings accounts – got room for one more? I work with ShoreBank – a longstanding institution that has a competitive online savings account at 3.5% interest. $1 minimum, no monthly fees, online and phone customer service… more details: http://shorebankdirect.sbk.com/ If you are interested in promoting good causes – ShoreBank is a great option. ShoreBank has a bottom line mission to invest in socially and environmentally (and sometimes both at once) responsible projects and businesses – so a good rate, a great cause. Check out the stories on the site above to learn more.

  • Avatar chris October 3, 2008, 7:33 pm

    Good postings,
    It seems that the new tax free savings plans in 2009 will take care of a lot of tax concerns, 10,000 pa per couple, all interest/profits tax free.
    Does anyone know if it’s retroactive for any years? How do people intend to use it?

  • Avatar Chris October 5, 2008, 2:49 pm

    I know that this is an old post, but I’ve finally got to the point where my emergency savings account has grown to a decent amount. Instead of having it sitting in a checking account earning like 0.1% or something, I’ve been looking into high interest saving accounts.

    I remember the days when PC financial was giving like 4%, but I don’t see that anymore. Under $1000 balance, they give 2% and over $1000 they give 3.05%.

    I was looking at the TFSA at ING Direct. You can sign up now and they’ll pay you like double interest to make up for the tax until TFSA’s legally come into effect January 1st.

    Basically, what do you think I should go for? I currently use PC Financial for my regular checking account. I want the highest interest I can get. I’m not really concerned about where. It might be best, psychologically, to be done outside of PC financial where it isn’t easy for me to touch on my day to day banking.

    I’m also curious. Do these interest rates end up changing due to Bank of Canada’s interest rates??

  • Avatar DAvid October 5, 2008, 8:03 pm

    I understand savings account rates are based on bond rates, whereas lending rates are based on the Bank of Canada overnight rates. In either case, they do fluctuate.

    ING has a pretty good come-on! They are offering you an extra $37.00 (taxable in your hands) to open a TFSA with them. Cheap advertising for them in my opinion.

    You can find rates here:
    http://money.canoe.ca/rates/gics.html but some institutioons offer higher rates to new customers, so check around.


  • Avatar Shyler October 6, 2008, 7:07 pm

    Hey all :)

    We are debating between and ING’s high interest savings account or the promotional TFSA they are offering at the moment. It’s not alot, but we have $2000 + $500/month to set aside and seeing as our Mutual Funds are in the hole, we’re looking at other options. Our goal is to use this money towards a down-payment on a house in 2-3 years. Not all of it will come from this account, but we’d still like maximum value. I’m just not sure what the better option is a would love it if someone could break it down for me!! Thanks in advance ofr any advice :)


  • Avatar Nic October 8, 2008, 11:30 am

    Hi all,

    I too need advice. I’m in my late twenties & don’t have any concept of how to save money or what I’m supposed to do with it. I just got a new job this year & am making 47K. I was told that rather than putting $ towards savings, I had to pay down my debt first (minimal credit card/OSAP – will be paid off in 3mths -woohoo!). So, now I’m looking into savings accts/GICs/RRSPs & I am completely lost. Can anyone offer a little bit of direction? I don’t want to end up like my parents with very small pension & no savings.

  • Avatar DAvid October 8, 2008, 12:10 pm

    Shyler & Nic,

    I suggest you look into the TFSA (ING or GICs) as your current savings vehicle. For Shyler, the wish to withdraw it for a house piurchase in a few years means preservation of capital is very important.

    In Nic’s instance, it will give breathing space to learn how & where he wishes to invest his money. Nic also should be considering the benefit of RRSPs, and at what stage to invest and when to claim them. If his income is likely to increase there might be value in claiming the RRSP contributions in the future when he is in a higher tax bracket.


  • Avatar Shyler October 8, 2008, 12:55 pm

    Thanks David :)

    I think we’ll be going through ING for sure. I have a couple more questions if ya don’t mind :) With the economy in a steep slump, my mutual funds are worth less and less everyday. Seeing as they are a long term investment, is it wise to leave them in and have faith in the knowledge that markets always flucuate and things will turn around? Should we actually be buying more because they are low right now? Or, should we take them out, put them into an account where the principal is secured until things bottom out and then buy back into the market at a cheaper price? Like Nic, I am also in my late twenties with 3 kids and am trying to figure this all out!! It’s scary working so hard to put aside a small chunk of change and lose over 15% of it in a week and a half.

    I really wish they would teach these kinds of real money issues in high school, so young people wouldn’t have to spend the majority of their making mistakes and figuring all this out the hard way! They don’t even teach you to do basic taxes. Algebra certainly doesn’t help with budgeting lol! I just wish I knew what little I know now, when I was 19 :)

  • Avatar Alan P October 8, 2008, 8:11 pm

    Great article.
    I just sold my house and with the turbulent financial market (will it be recession or just keep bumbling along with the usual ups and downs?) I will be temporarily sticking the proceeds into high-interest savings accounts, like
    Presidents Choice (3.05%),
    Can Tire (3.05%)
    and maybe Peoples Trust (4%),
    all CIDC insured to $100,000 each.

  • Avatar Nic October 9, 2008, 12:22 am

    Yes, thank you DAvid for narrowing down the options instead of giving us too many. I was vacillating between PC Financial, ING & ICICI. Even though ICICI has the highest rate at 3.4%, the tax free option with ING sounds like a good idea.

    However, while searching the ING Direct website, a few more questions popped up. ING has a new 1.5 yr GIC @ 4%. Can someone explain why a GIC for 1.5yrs can have such a special rate (i.e. it doesn’t follow the trend based on the other rates)? They also offer 1yr @3.65%, 2 yrs @3.80%, 4 yrs @ 3.90%, and 5 yrs @4%.

    Also, DAvid, please excuse my next very basic question, but as Shyler mentioned no one taught us about taxes! Which income bracket am I in and what bracket do I have to be in to claim RRSP contributions? Alternatively, I’m assuming the money that I put in the TFSA will lower the income for which I’m taxed at the end of the year. Based on the bracket that I’m in currently, how much would I have to put in by the end of the year to drop me down into a lower bracket? I guess I started this too late. I am ashamed to say that my mother has always done my taxes. So I don’t even know how it works, although I never made nearly as much as I do now.

    Shyler – WORD. I feel like I am paying the price for not majoring in business or finance.

    Nic (She hopes everyone keeps posting comments b/c they are so informative!)

  • Avatar DAvid October 9, 2008, 1:39 am

    Shyler asks: ” With the economy in a steep slump, my mutual funds are worth less and less everyday. Seeing as they are a long term investment, is it wise to leave them in and have faith in the knowledge that markets always flucuate and things will turn around? Should we actually be buying more because they are low right now? Or, should we take them out, put them into an account where the principal is secured until things bottom out and then buy back into the market at a cheaper price?”

    I can’t offer you advice on this. Some would say “Buy up the bargains”; others, “Hold the course’; and yet others, “The sky is falling….”. My Financial Advisor reminded me that even in the 1930’s, those who stayed invested did far better than those who pulled out of the market! On a personal note, I am currently taking a wait and see approach as to further investing, having watched much of the RRSP top-up I made in August disappear.

    and: “I really wish they would teach these kinds of real money issues in high school, so young people wouldn’t have to spend the majority of their making mistakes and figuring all this out the hard way!”

    We all learn from the school of Hard Knocks, few accept learning for others without empirical testing. I call this the “Wet Paint” school of learning.

    Nic asks: “Can someone explain why a GIC for 1.5yrs can have such a special rate (i.e. it doesn’t follow the trend based on the other rates)? “

    To loan money, the bank must have deposits. Just now that bank likely has insufficient deposits to cover expected loans in that 1.5 year window. Thus they offer a premium rate to attract customers to that period rather than others. In that fashion they maintain liquidity.

    and: “Which income bracket am I in and what bracket do I have to be in to claim RRSP contributions? Alternatively, I’m assuming the money that I put in the TFSA will lower the income for which I’m taxed at the end of the year. “

    You can find out your tax bracket at: http://www.walterharder.ca/MarginalTaxRateCalculator.html as well as the effect of buying RRSP. An RRSP is equal to reducing your income by the amount of the RRSP, i.e. a $5000 purchase comes off the top of your income. You can purchase an RRSP at any time, and at any income, however, if you buy it today, but wait and claim it in future years, you gain the benefit of growth, and may see a benefit from claiming the tax refund when you have a higher taxable income. Of course, if you also invest your refund, instead of waiting you would likely come out furthest ahead.

    The TFSA does not lower income; you pay no taxes on the income the deposits produce.

    I appreciate your response, but please remember I am not a financial planner (I actually work in the health field), so please take my comments accordingly.


  • Avatar Shyler October 10, 2008, 2:11 am

    No worries Dave :)

    I’m just looking for an opinion and enjoy hearing other peoples perpectives and experiences! Despite how helpful you have been….rest assured I will not be basing my future money making endeavours solely on your wealth of knowledge ;) I appreciate that you, and others on here, are willing to share what you do know with everyone else. I find searching for info online super frustrating sometimes and have gained lots of useful knowledge and insight from this thread. For instance the Walter Harder tax calculator…LOVE IT!! I’ve been looking for something like that for a while. Obviously my web-surfing skills are something to be desired :)

    I’ve just come to a place in my life when suddenly all that is going on politcally and econmically is very important to me. I know i’m not the only one at that stage right and this collective brain sharing is a wonderful thing!

  • Avatar DAvid October 10, 2008, 2:31 am

    Discussions like this are a form of knowledge transfer. In the not-to-distant future, I hope to see your contributions helping this community.

    I can only hope my contributions get the gears turning, and the smoke rising.


  • Avatar Joe October 15, 2008, 12:49 am

    FInally the Tsunami is hit. All the Financial institutions hit the ground like roller coaster. In stead of blaming Federal Reserve for failing to forecast and control the private Financial sectors, it is better to concentrate on owns future. It is evident from the history that assets cannot be made using Credit. The money hungry Institutions have ignored fundamental principles thats the credit to be balanced in the form assets. Granting Credits with out validation, raising house values when there is a slump in Manufacturing sector, slump in IT sector, outsourcing service Industry, increase in unemployment rate, spending trillions on Iraq war show the gross misconduct of the Financial Institutions.
    The only way to overcome this is wise spending and building assets by every American, reducing expenditure at every possible way. Then it should not be too long before the econonmy rises. This applies to Federal Govt. also. Unfortunately people who doesnot have money sense will not visit websites like this and will never know. I felt very sad to see the vanishing of hard earned dollars by sheer labor. I hope Americans will learn this lesson and teach the lesson to Govt.

  • Avatar nait October 28, 2008, 5:31 pm

    Hi everyone, all the comments are very interesting. Could someone tell me more about ICICI. Is there a office I could visit?

  • Avatar Mike K October 28, 2008, 11:20 pm

    People’s Trust looks interesting with their 4% savings account. I’d love to hear from anyone who has their money there. Any catches?


  • Avatar Mike K October 28, 2008, 11:54 pm

    For those interested, there is a decent threat about them on RedFlag:


    Main gotchas seem to be 9 day $ hold, 1 external account can be linked, and no online banking (though this can be done from another bank that allows push/pull of funds, like ING)

    They currently don’t have plans for a TFSA, but if they go down that path, I’m signing up.


  • Avatar Vance November 14, 2008, 1:16 pm

    ING just dropped their rate from 3% to 2.7%, which also means the introductory rate for their tfsa goes from 6% to 5.4%. BOOO.

  • Avatar Alan P November 14, 2008, 1:46 pm

    Maybe good time to lock in those rates? with a GIC?

  • Avatar Online Savings Account November 15, 2008, 7:36 am

    Right now in the States you can get a 4.00% APY on an online savings account through CNB Bank Direct.

  • Avatar Scott November 15, 2008, 11:07 am

    I would be careful about opening an American account right now, especially if you have to convert to $US. You will “pay” 20% to deposit your cash down South, but when their dollar starts dropping in 2009… Why risk loosing 20% in the long term just to gain a measly 1% in the short term? Especially if it’s concerning your ‘Emergency Fund’!

  • Avatar Chris November 17, 2008, 6:58 pm

    For those able to save in US banks, venturebankdirect.com has been a good find for me. They are offering 3.8% APY with no minimum balance. Unlike a lot of other online savings accounts I looked at, there was no delay in crediting funds to my acccount. I was earning interest in 1 day.

  • Avatar kabloona November 17, 2008, 8:26 pm

    The INGDirect rate on the Investment Savings Account is now 2.7%.

    Ouch….switched most of my money out until it goes back up….

  • Avatar Mike November 25, 2008, 11:02 am

    I bank at a large bank and at Citizens Bank. Was just on citizens website and they will give you $50 if you open an account with them. Have to be a new customer though so doesn’t help me but may help others on this blog. You may want to read the small type. I didnt pay that much attention since I cant take up the offer.

  • Avatar Alan P November 25, 2008, 2:13 pm

    Thanks for the head’s up about Citizens Bank. I checked it out.
    Receive $50 for a minimum $100 deposit!
    They have savings and free chequing, and online, phone, or ATM (mostly through Credit Unions) transfers.
    It will take a few days to join up, so don’t delay. Here is the info:
    https://www.citizensbank.ca/Personal/Products/BankAccounts/50GiftPromo/ and here is the nitty gritty:
    The $50 Bonus is eligible to any new Citizens Bank member that applies for their first Citizens Bank Global Chequing Account and/or Ultimate Savings Account between November 24, 2008 and December 22, 2008. To qualify for the $50 Bonus, a minimum initial cheque deposit of $100 into the account is required by December 22, 2008 and the initial deposit is maintained in the account for a period of three months from the date of the deposit. One $50 Bonus per member but for joint accounts, only one $50 Bonus will be deposited into the joint account.

  • Avatar Alan P November 25, 2008, 10:57 pm

    So the important thing with this account is to keep the first investment low. (QUOTE
    the initial deposit is maintained in the account for a period of three months from the date of the deposit
    That way, if you put in more in a second deposit, and want to remove just a part of it within 3 months, you won’t loose the $50 bonus.
    It pays to read the fine print!

  • Avatar Carol December 8, 2008, 6:21 pm

    HSBC Direct are offering a rate of 3.75% for a promotion on new money. I think it lasts into the new year. As far as I can tell you can also apply for the 2009 tax free savings account through the direct savings account login.

  • Avatar Pinkmel December 9, 2008, 4:21 pm

    I have 2 pc financial cheq accounts and a saving. Love it, except in recent months, they have introduced bounced cheq fee of $7 – still lower than BMO charging $35.

    I would love to have another pc cheq acct to track expenses according but they won’t let me.

    Anyone had experience getting more than 2 pc cheq accounts with them?

  • Avatar Alan P December 16, 2008, 5:10 am

    Million Dollar Journey, that last post may be a troller/linker, it’s for USA markets – lets keep this Canadian, it’s hard enough trying to sort through all the numbers in one country.

    And the interest rates on high-interest rates (and GICs) seem to be dropping, so the lat update at the top of this page may be getting a little old (Ocotober) But maybe you like the dust to settle a little first….

    Nevetheless, I appreciate this site!

  • Avatar DAvid December 16, 2008, 11:30 am

    Alan P,
    Up to date rates can be found here: http://money.canoe.ca/rates/


  • Avatar Sky December 31, 2008, 8:01 am

    Outlook Financial.ca High Interest Savings 3.05 % & checking
    Citizens Bank Checking 0.05 %

    0.05% = 0.0005 = 5 thousandths of a % ….”so don’t delay”..big bank philanthropy??

    on $20 000 for a year Outlook = $610 Citizens = $10

    I use Outlook as a checking & savings account = one free debit a month and I manage with 2 or 3 debits / month. Hey– for the extra $600 at Outlook, depending on your needs, that’s a lot of banking.

  • Avatar Alan P December 31, 2008, 7:31 pm

    what would their website be, Sky?

  • Avatar blue sky January 27, 2009, 3:43 am

    Hi Alan P
    Couldn’t re-find this site till now. The websit for Outlook is
    http://www.outlookfinancial.com although I’m sure you got it by now.

    Their parent company is Assiniboine Credit Union, based in Winnipeg, Manitoba. From outside Wpg. their number is 1-877-958-7333 & in Wpg is 958-7333.

    All deposits are guaranteed without limit. But like everyone else they have dropped their interest rates drastically…high interest savings is now 2.80%. They have also dropped the GIC rates…..[1yr cashable…2.85%]–[2yr…3.20%]—-[3yr…..3.45%]—-[4yr…3.60%]—-[5 yr…..3.85%]

  • Avatar Carole February 2, 2009, 3:31 pm

    Check out PCF now as they slashed their interest rate on TFSA from 3.5% to 2.55 as soon as people signed in to the new account within two weeks.
    Also cut their highest interest plus account from 3.05% to 2.25 I have moved every penny out fast…sounds like bait and switch to me!

  • Avatar DAvid February 2, 2009, 3:59 pm

    So where did you move your money? All the time it sits outside the TFSA the interest earned attracts taxes, giving you an even poorer return…..


  • Avatar kevinw February 9, 2009, 5:23 pm

    check out maxa financial 4.55 gic rates up to 7 yrs…its the best around that I can find

  • Avatar Helpplease February 27, 2009, 12:29 am

    I am wondeirng if anyone has heard of Primerica, their dealings, and what they offer. An associate at work is a representative of the company who would like to come over present his company. I have looked online and cannot find any hard information on who they are and what they offer. Can anyone offer up advice?
    Also, I am looking to begin investing for the short term (another home) and the long term (retirement). Where would my money be best invested? I am also looking to invest for my child education. I was considering the standard family RESP, though have heard that it is sometimes better to invest in a high interest savings account. I do not see the advantage to this, as I am sure I would be taxed on the interest earned. Any advice?
    Thank you.

  • Avatar Alastair August 26, 2009, 12:59 pm

    Thanks for the info. $25 should be headed your way!

  • Avatar Steve September 21, 2009, 3:30 pm

    Why are the interest rates being offered getting slashed so much? I was just logged into ING and it’s now 1.05%. A year ago it was over 3%! A year ago with BMO I was getting 0.75% on my savings and now it’s 0.25%. And the GIC rates have plunged too. It’s a joke.

    I know the economy hasn’t been doing well but while the all banks have lowered the interest rates on savings accounts, they sure haven’t lowered the amount of fees that they charge users*. You would think with today’s economy, that encouraging people to save would be good for the banks.

    – Steve

    * I am well aware that some of the above banks have no fee accounts.

  • Avatar BCGray December 31, 2009, 6:26 pm

    I would check out Canadian Tire Financial Services rates are much higher than either ING or PC, and it is a Canadian Corporation

  • Avatar ITGUY March 7, 2010, 7:05 pm

    “I would check out Canadian Tire Financial Services rates are much higher than either ING or PC, and it is a Canadian Corporation”

    That may be true, though they’re moving everything they can to India.
    Just ask the poor saps who had train their Indian replacements.

  • Avatar Robyn February 23, 2011, 2:38 am

    You get taxed on money that sits in your bank account? Im new at this (and totally confused) and always lived paycheque to paycheque so i have never had to worry before but I am coming into some money in the next few weeks and I am trying to figure out the best way to save and also make some money on it, yet I still need some access to it as monthly withdrawls for rent will be needed. I currently have a scotia money master saving account but I think its one of the lowest interest paying….. help!!!!


  • Avatar UltimateSmartMoney October 10, 2011, 7:48 pm

    I have been very satisfied with ING account. I highly recommend it just like this post states. It really beats the bank rates.

  • Avatar Argos January 19, 2012, 6:27 am

    I opened a PCF savings account alongside my CIBC account. I think its important to have a brick and mortar bank though, any thought?

  • Avatar Melanie October 5, 2012, 5:13 pm

    Can someone time stamp this blog? The rates etc become irrelevant if this content is out of date. I don’t see any indicator here.

  • FT FrugalTrader October 5, 2012, 9:34 pm

    @Melanie, the rates are time stamped “Rates updated as of July 28, 2009
    , but yes you are right, they are way out of date.

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