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High-Interest Savings Accounts Revisited

February 24th, 2008 · 23 Comments

With recent media reports indicating that the Virgin Group is planning to launch banking in Canada, the already crowded high-interest savings accounts marketplace is about to become more so. Here’s a long list of places where you can now park your cash:

  1. E*Trade Cash Optimizer Account: The discount broker offers 4.15% on Canadian dollar and 2.5% on US dollar account. The account is not insured by CDIC but covered by the CIPF of which most discount brokers are a member.
  2. ICICI Bank: The HiSAVE Savings account offers 4.10% on Canadian dollar and 3.25% on US dollar accounts. Customer service issues have been reported in the press and it is not clear if they have improved now.
  3. Citizens Bank of Canada: The Ultimate Savings Account offers 4.00%.
  4. Canadian Tire: The High Interest Savings account offers 3.85%.
  5. Achieva Financial: The Manitoba-based credit union offers a daily savings rate of 3.85%. Credit Union Deposit Guarantee Corporation, not CDIC, insures the deposits.
  6. Outlook Financial: Another Manitoba-based credit union offering 3.85%. Deposit insurance is through Credit Union Deposit Guarantee Corporation.
  7. President’s Choice Financial: The Interest Plus savings account offers 3.75% if the daily balance is more than $1,000. A bonus interest, ranging from 0.03% to 0.25% is paid every year depending on the average annual balance. PC Financial also offers an Interest First savings account that pays 2.8% on any balance.
  8. HSBC Direct: The Direct Savings Account offers an introductory rate of 4.75% until May 2, 2008 and a regular rate of 3.7%.
  9. ING Direct: The pioneer in online savings now offers a middle-of-the-pack 3.65% on C$ and 2.5% on US$ savings.
  10. Dundee Bank of Canada: Only available through a financial advisor and offering 3.6% on C$ and 2.75% on US$ accounts.
  11. Altamira CashPerformer: Also available through your discount brokerage account (watch out for redemption fees). 3.6% on C$ accounts and 2.75% on US$ accounts.
  12. RBC High Interest eSavings: If you are already a RBC client, the eSavings account offers 3.5% and free transfers between the account and an RBC chequing account.
  13. Scotia Money Master Account: If you are already a Scotia bank client, the Money Master account offers 3.25% and free transfers between the account and other Scotia Bank accounts.
  14. MRS High Yield Plus:This savings account from Mackenzie Financial offers an interest rate of 3.6%.
  15. Manulife Bank Advantage Account: Actually a chequing account that offers an interest rate of 3.55%. You’ll pay a fee for using the chequing features.
  16. Summit Savings Account: Canadian Western Bank offers 4.15% on a minimum balance greater than $5,000.

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Tags: Saving

23 responses so far ↓

  • 1 Nicolas // Feb 24, 2008 at 9:30 pm

    Nice update.

    Here’s an extra one.

    ICICI service… not updated. Still quite bad.

    Nicolas

  • 2 Rob // Feb 25, 2008 at 1:06 am

    Is the Etrade account CDIC insured? Is it insured under the investor protection fund?

  • 3 brad // Feb 25, 2008 at 10:28 am

    Are all of these high-interest accounts free of fees? That’s an important consideration. I assume the answer is yes, but wasn’t sure.

  • 4 KS // Feb 25, 2008 at 10:36 am

    Great summary CC!!

    Do you or any of your readers know where I could obtain the best business savings/chequing account? I’m looking for an account with minimal to no monthly fees.

  • 5 Canadian Capitalist // Feb 25, 2008 at 11:20 am

    Rob: Thanks for pointing out that E*Trade account is not CDIC insured but covered by the CIPF. I’ll update with that information.

    Brad: Good point again. I believe some accounts charge fees (e.g. RBC and Scotia accounts).

    KS: I’ve looked at business chequing accounts and the best seems to be from RBC. The min. charge is $5 per month.

  • 6 Ahmed // Feb 25, 2008 at 11:28 am

    The Scotia Money Master only charges a fee ($5) if you withdraw from that account directly. However there is an easy work around, just do an online money transfer to your chequing account and withdraw from there for no charge. This account has no minimum balance requirement.

  • 7 Loki // Feb 25, 2008 at 12:22 pm

    Doesn’t PC Financial have a 4.1% high interest savings account if balance is over $1,000? (not 3.75%)

  • 8 Canadian Capitalist // Feb 25, 2008 at 1:10 pm

    Loki: According to this page PC Financial’s interest rate is 3.75%. Perhaps, they had a higher rate before the Bank of Canada lowered interest rates?

  • 9 Steve Heath // Feb 25, 2008 at 2:06 pm

    Loki - that through me a curve too since I have one of those accounts and didn’t realize it had dropped, so I went to the site, it looks like they dropped the interest for the regular savings account, but if you have it inside the RRSP it’s still 4.1%.

  • 10 Steve Heath // Feb 25, 2008 at 2:07 pm

    Ugh, that’s what I get for typing tired.. it threw me a curve, not “through” :)

  • 11 Gean Oliveira // Feb 25, 2008 at 3:20 pm

    Last week I opened my account with RBC. The main reason is that I am also a RBC customer :) I was planning to open an account with ICIBC but I did not just because the complains people are having about their CS.

    Thanks for the update!

  • 12 JG // Feb 25, 2008 at 6:38 pm

    Also check out CWB Summit Savings account. I have only been using them for 3 months, so too early to comment on CS, but their rate is great.

    http://www.cwbank.com/rates/chequing_savings_accounts.asp

  • 13 RG // Feb 25, 2008 at 6:49 pm

    I use ING. It’s tempting to chase a higher rate, but I have been very happy with ING’s service, straightforwardness and absence of fees.

  • 14 Sport11can // Feb 25, 2008 at 8:36 pm

    Great Blog. Long time reader but this is my first post.

    These are not necessarily better, just more options:

    MRS, Mackenzie Financial High Yield Plus Account 3.60%
    Manulife Advantage Account 3.550%

    I did have an MRS account but had switched to a Manulife account for better online transfers. I also have an ING account, but doesn’t everyone? :-)

  • 15 Canadian Capitalist // Feb 25, 2008 at 9:19 pm

    JG, Sport11can: Thanks for the heads up about these products. I’ll update the post with these accounts as well.

    RG: Any of these accounts (as long as fees of any kind can be avoided) would be a great savings account. There is very little difference at least among the top accounts. However, if you need to park a huge amount (say proceeds of selling a house or something), it makes sense to seek out every little extra bit of interest.

  • 16 » February Link Love (Selected Investing Links) # The Shark Investor // Feb 27, 2008 at 4:22 pm

    [...] The Canadian Capitalist has revisited high interest savings accounts. [...]

  • 17 CanucksFan // Feb 27, 2008 at 4:38 pm

    Thanks for the update! I guess I am switching my savings from PC Financial to E-Trade after reading this post!

    Does anyone have an E-Trade account? I assume I will have to transfer money from the E-Trade account to a Chequings account in order to cash out. Any complaints for the E-Trade accounts?

  • 18 Albin Forone // Mar 3, 2008 at 1:07 pm

    KS: Not listed here is the BNS MoneyMaster, currently 2.35% non-registered, but you may be interested in a feature that is not publicized, but you can confirm with the bank phone reps: if you maintain a constant balance over $10k, they waive all transaction fees for that account and for the associated chequing account. One time I dipped below $10k and found I had about $60 worth of fees, i.e. “saving” that much in addition to the interest rate.

    CF: I keep substantial cash at Etrade, main thing is to sign up for their QuickTransfer function which facilitates overnight back and forth xfer (no fee at Etrade’s end) between the “Optimizer” and your specified bank account.

  • 19 Canadian Capitalist // Mar 3, 2008 at 1:21 pm

    CF: E*Trade’s Cash Optimizer account is not CDIC insured but rather covered by the CIPF. I have an account with E*Trade and have no complaints and like Albin mentions QuickTransfer allows you to move money between your chequing account and E*Trade painlessly.

  • 20 Christine // Mar 7, 2008 at 4:24 pm

    If anyone is worried about bank guarantees, Achieva (a credit union subsiduary) has the best one: All deposits are 100% guaranteed by the Credit Union Deposit Guarantee Corporation of Manitoba. Whereas CDIC only guaranttes up to $100,000 per individual deposit. …and as of today, their rate is still 3.85%

  • 21 Shoeb Ahmed // Mar 24, 2008 at 12:57 am

    I have a PCF Interest Savings Plus account, and the reason I got it was because of it’s 4.1%. And I _just_ realized that it has been brought down.

    I opened an ING Direct IS Account (didn’t send the cheque though), and right after I found this website. I’m kicking myself now for having opened it. (Anyway to close it because I still didn’t send the cash?)

    Now, what I want? I want a high-yield savings account with no minimum balance, no fees, no funny-business, that I can link to my PCF Chequing account (It’s my main/primary account) and I can move money between these accounts without paying any “transfer” fees.

    What do you guys recommend for a save-money newbie like me?

    PS: The link to the Etrade website shows 3.55% interest for CDN.

  • 22 stu // Mar 30, 2008 at 8:55 pm

    i just noticed today that rbc has dropped their rate even further for their high interest e-savings accounts, currently hovering way below the competitors at 3%.

    very annoying to say the least that there is no mention of this anywhere from rbc to their customers. when i signed up i was getting 4% and now its down to 3%, not cool.

  • 23 Canadian Capitalist // Mar 30, 2008 at 10:20 pm

    Shoeb, stu: Savings accounts tend to move in lock-step with the Bank of Canada interest rate decisions. The Bank has been cutting rates recently, so that will be eventually reflected in the savings accounts.

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