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Key takeaways:
Understanding the different savings accounts will help you maximize the benefits and grow your wealth over the years.
Whether you're saving for a down payment on your first home or building an emergency fund for an unpredictable future, a savings account is a great option to park and grow your money while you work toward your financial goals. A high interest savings account (HISA) provides the added benefit of earning a higher interest rate on your savings than other types of savings accounts.
In this article, you’ll learn how a savings account works, the different types of savings accounts available, and how a high interest savings account can help you achieve your financial goals faster.
A high interest savings account is a type of account that offers a higher interest rate than traditional savings accounts. This means your money earns more just by sitting in the account — no extra effort required. HISAs are a good option for short- or medium-term savings goals, such as building an emergency fund or saving for a big purchase like your first home.
Some high-interest savings accounts can be held inside a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP), giving your savings a boost while tapping into valuable tax advantages.
Unlike a Guaranteed Investment Certificate (GIC), a HISA typically doesn’t tie up your money for a fixed term. One thing to note though is that some accounts do have holding periods but this will depend on the individual product, so carefully read the account terms when signing up. You can access your funds when needed, although removing funds before the premium period ends will result in losing the premium interest. Plus, many HISAs come with extra perks like no monthly fees, no minimum deposit required and multiple goal-tracking options.
Best of all, HISAs share the benefits of other savings products. Your savings grow risk-free, making it a good way to put your money to work and stay ahead of inflation.
A high interest savings account works by paying you interest — often calculated daily and paid monthly — on the balance you keep in the account. Thanks to the magic of compound interest, the more you save and the longer you leave it untouched, the more interest you earn. It’s a simple, low-maintenance way to build wealth over time. It’s like getting paid to save!
Most HISAs offer variable interest rates, which means the rate of interest can go up or down based on market conditions, the current rate set by the Bank of Canada or the financial institution’s policies. Some HISAs even offer tiered rates or premium interest periods, where you can earn a higher interest rate by not making withdrawals for a set number of days — like Scotiabank’s MomentumPLUS Savings Account.1
HISAs aren’t tied to the stock market, so your savings aren’t affected by market volatility, and your principal is protected. However, interest rates on HISAs are typically influenced by movements in the Bank of Canada’s policy rate, which can impact your returns.
While you can generally withdraw your funds at any time, doing so during a premium period may result in a penalty. This combination of competitive interest rates, flexible access to your funds, and minimal risk makes a HISA an attractive savings option—just be mindful of any conditions or penalties that may apply during premium periods.
Open a savings account online or in branch
You can open a savings account online or by making an appointment at a local branch, whichever way is more convenient for you. Once the account is opened, you might need to make a deposit. While your money is sitting in your account, it will start to accumulate interest.
Link a chequing account to make auto deposits
A chequing account is great for everyday spending, but a savings account is where your money gets to grow. It’s not meant for daily use — it’s more of a “set it and forget it” kind of thing. That’s why it’s a good idea to have both. Link them together, and you can easily move money from chequing to savings. You can open both online or at a branch — whatever works for you. The last step is to set up automatic transfers to put your money on cruise control.
A savings account offers many useful benefits, including:
Safety: CDIC insurance protects your deposits if your financial institution fails (goes bankrupt). Putting your money in a savings account is much safer than stuffing it in a cookie jar or under your mattress because it's insured by the Canada Deposit Insurance Corporation (CDIC). CDIC insurance protects your deposits if your financial institution fails (goes bankrupt).
Liquidity: Compared to putting your money in a GIC, a savings account allows you immediate access to your money should you need it.
Interest: Putting your money into a HISA allows you to earn more passive income through interest than you would with a regular savings account. Interest is the amount a lender charges to loan money. Or, in this case, the interest rate is the amount of money you're awarded for saving your money in a HISA. The interest rate you earn can vary based on where you save your money, how much you save and how long you save.
Reduce temptation: Putting your money into a savings account can help reduce the temptation to spend. Automating your savings (even a tiny amount per week), will eliminate any temptations altogether and will give you that feeling of accomplishment each month when you check your balances.
Preparation: Using a savings account to grow an emergency fund is a great way to prepare for the unexpected.
Organization: Some savings accounts allow you to organize your money into different buckets so you can clearly define your individual savings goals and fund them accordingly.
There are a variety of savings accounts you can use. The one that's right for you will depend on your specific needs and savings goals. Your financial situation may change from one life milestone to another, so reassess regularly to ensure you have the best financial product mix at your disposal.
High interest savings account (HISA)
A HISA is designed for savers who want their money to grow faster — without taking on risk. Thanks to its competitive interest rate, your balance earns more over time compared to a regular savings account. Scotiabank offers MomentumPLUS Savings Account, which allows you to save for multiple goals conveniently in one account.1
Foreign currency savings account
A foreign currency savings account allows you to save currencies other than Canadian dollars and earn interest. Scotiabank offers two foreign currency accounts: the Scotia U.S. Dollar Daily Interest Account and the Scotia Euro Savings Account.
Savings accounts built for youth
A youth savings account is a type of account that’s specifically created for young children or teenagers.
Since these accounts are for minors, they usually come with some helpful features: parental oversight, little to no fees, interest on savings and a few limits on things like withdrawals. It’s all about giving young savers a safe space to build good habits and watch their money grow.
Opening one is the first step in getting your child started on the path to a strong financial future.
Savings accounts designed for students
A student savings account is specifically designed for those getting ready to head off to post-secondary. Similarly to the youth savings accounts, student savings accounts usually come with benefits like no monthly account fees and rewards on debit transactions. These accounts are a great tool to learn money management.
Did you know?
Students and young adults can also benefit from the Scotiabank Preferred Package for Students and Youth, a chequing account packed with perks designed to help support the transition from teen to student life. For qualifying account holders, this package has no monthly account fees, lets you earn Scene+ points with the Scene+TM Program2 and offers an additional 0.05% interest when linked with a MomentumPLUS Savings Account.3
The exact amount you choose to keep in your savings account will depend on what you can afford to save as well as your savings goals. However, it's recommended that all Canadians can benefit from having an emergency fund.
Many experts suggest having between three to six months of total living expenses. If you also have goals of saving for a special trip or a new car, you can increase your savings accordingly.
A regular savings account and a HISA both allow you to earn interest on your account balance. A HISA can help you to supercharge your savings and reach your savings goals even sooner as it typically has a higher interest rate.
With Scotiabank's MomentumPLUS Savings Account, the longer you save, the higher the interest rate. You can choose between different premium periods to save your money for (90, 180, 270 and 360 days) and track your savings along the way.1 That’s not all — this account has no monthly account fees and there’s no minimum balance required.
A HISA has the potential to benefit most Canadians.
The days of saving your money in a coffee jar on the counter are over. Not just because this can make it tempting to spend it, but also because of inflation.
Simply put, inflation is when the cost of things goes up. A carton of milk or a bag of apples costs more today than it did a year ago. The bottom line is that if you aren't earning interest on your savings, then your money is losing value over time.
The point of having a savings account is to help you prepare for emergencies and save money for short and long-term financial goals (buying a house, paying for a wedding). Keeping your money in a HISA or any savings account allows you to grow your money while also offering quick access to your funds when you need them.
Ready to save towards your goals? How you can step up your savings for your future.
Includes Regular Interest Rate of 0.55%, plus a Package Interest Rate Boost of 0.10% for Ultimate Package holders or a Package Interest Rate Boost of 0.05% for Preferred Package holders, 90-Day Premium Period Interest Rate of 0.25% and a Welcome Bonus Interest Rate of 4.10% for 3 months. Regular Interest and Package Interest Rate Boosts are calculated daily, paid monthly. Premium Period Interest is earned when you choose a 90, 180, 270 and/or 360-day Premium Period; a longer Premium Period earns a higher Premium Period Interest Rate provided you don’t make any withdrawals within the Premium Period you select. Premium Period Interest is calculated daily, paid at the end of the applicable Premium Period. Welcome Bonus Interest is calculated daily and paid monthly for 90 days (3 months) on your first MomentumPLUS Savings Account opened. Interest rates are per annum and subject to change. Visit the Current Rates Page for more information and current rates.
Regular Interest is calculated by applying the Regular Interest Rate to your daily closing balance and is paid monthly. Refer to Current Rates Page for current Regular Interest Rates, which are subject to change.
A maximum of five Premium Periods at any one time, each of which can have a length of 90 days, 180 days, 270 days, or 360 days. For each Premium Period, Premium Interest is calculated daily by applying the Premium Interest Rate to each deposit, including any accumulated Regular Interest, until the end of the Premium Period. Premium Interest is paid at the end of each Premium Period, so long as no debit transaction has occurred within that Premium Period. When a debit transaction occurs, no Premium Interest is payable for that Premium Period and a new Premium Period of the same length will commence the same day. Refer to Current Rates Page for current Premium Interest Rates, which are subject to change.
Preferred and Ultimate Package account holders will receive the applicable Package boost to the Regular Interest Rate (the "Package Interest Rate Boost”). Refer to the Current Rates Page on Scotiabank.com for the Total Annual Interest Rate applicable to the Preferred Package and Ultimate Package (current Regular Interest Rate, plus Premium Period Interest Rate, plus Preferred/Ultimate Package Interest Rate Boost, as applicable), which is subject to change at any time without advance notice. It will take up to 10 business days after activating a Preferred or Ultimate Package account for the applicable Package Interest Rate Boost to apply. The applicable Package Interest Rate Boost will cease to apply effective as of the date that the Preferred/Ultimate Package account is closed. The Package Interest Rate Boost is an annual rate calculated daily on the MomentumPLUS Savings Account(s) closing balance and paid monthly.
Self-Service Transfer means a transfer to your other Scotiabank account without the help of a Teller, including through Scotia OnLine®, Scotiabank Mobile Banking and Contact Centre. The MomentumPLUS Savings Account does not have ABM or Point of Sale access or automated direct bill payment functionality.
The 4.10% Welcome Bonus Interest Rate Offer (the “Offer”) is available on all deposits made to your new MomentumPLUS Savings Accounts (“Account(s)”) only for 3 months (90 days) from the date the Account was opened (the “Bonus Rate Period”). If the Account is opened on a statutory holiday or Sunday, the Bonus Rate Period will begin on the first business day after the Account is opened. Individuals who are currently or were previously a holder of a MomentumPLUS Savings Account within the last 2 years are not eligible for the Offer. For joint accounts, at least one individual cannot currently or previously be a holder of a MomentumPLUS Savings Account within the last 2 years, to qualify for the Offer. The Bonus Rate is an annualized rate and interest is calculated daily and paid monthly. After the Bonus Rate Period ends, the balance in the Account will earn interest at the then current posted Total Annual Interest Rate for the Account (which includes the Regular Interest Rate and Premium Period Interest Rate and, if applicable, the Ultimate Interest Rate Boost or the Preferred Interest Rate Boost). Refer to Current Rates Page for current interest rates, which are subject to change. Account must be open and in good standing at the time of any Bonus Rate payout in order to be paid. For purposes of this Offer, an Account is not in ‘good standing’ if it has a negative balance, or the Account holder is in breach of the Account agreement with Scotiabank. Limit of one (1) Offer per customer; Bonus Rate will only apply to the first eligible Account opened. Note: If multiple MomentumPLUS Savings Accounts are opened on the same day, only the account that has the largest account number will be eligible for the Offer. For example, if two MomentumPLUS Savings Accounts are opened on the same day with account numbers 1234 and 1236, only the account with the higher number (1236) will be eligible for the Offer. Interest rates are per annum and subject to change. Offer may be changed, cancelled or extended at any time without notice and cannot be combined with any other offers. All other terms and conditions of the Account continue to apply. Refer to the Welcome Bonus Rate Offer Terms and Conditions & Day-to-Day Banking Companion BookletDay-to-Day Banking Companion Booklet. By making a deposit during the Offer Period, you are deemed to have accepted the offer, and consent to receive notices electronically via Scotiabank’s Digital Banking service which you can access by logging into ScotiaOnline or our mobile banking app. These electronic notices will notify you 21 and 5 days in advance of when the Bonus Rate Period expires and of any changes to your account(s) that will take effect after the offer period ends.
