A High-Interest Savings Account (HISA) is the smarter alternative to parking money in a standard bank savings account. While a traditional savings account at a major Canadian bank pays almost nothing, a HISA pays interest that keeps pace with — and sometimes exceeds — inflation.
How a HISA Works
A HISA functions like any other savings account: you deposit money, earn interest, and can withdraw whenever you want. The difference is the interest rate.
Standard savings account (Big 5 banks): 0.01–0.5% annually
High-interest savings account: 3.0–5.5% annually (as of 2026)
Interest in a HISA is typically calculated daily and paid monthly. There is no lock-in period — funds are fully accessible at any time.
Who Offers HISAs in Canada
The highest HISA rates in Canada are offered by online-first banks and financial institutions, not the traditional Big 5:
| Institution | Account Type | Notes |
|---|---|---|
| EQ Bank | Personal Account (functions as HISA) | No fees, high base rate, no minimum |
| Tangerine | Savings Account | Promotional rates for new clients; competitive base rate |
| Simplii Financial | High-Interest Savings Account | CIBC-backed; competitive for existing customers |
| Neo Financial | High-Interest Savings | Competitive rate; no branch access |
| Wealthsimple Cash | Cash Account | High rate; debit card included |
| Scotiabank MomentumPLUS | Savings Account | Rate bonus with longer holding periods |
| BMO Smart Saver | Savings Account | Competitive promotional rate for new deposits |
| Motusbank | HISA | Competitive for credit union members |
| Desjardins (Quebec) | HISA | Quebec-based; credit union deposit insurance |
Big 5 banks (RBC, TD, BMO, Scotiabank, CIBC) offer savings accounts but their standard rates are well below what online banks pay. They occasionally offer promotional rates for new deposits.
How HISA Interest Is Calculated
Most Canadian HISAs calculate interest daily based on the closing balance:
$$\text{Daily interest} = \frac{\text{Balance} \times \text{Annual rate}}{365}$$
Example: $10,000 at 4.5% annually
Daily interest = ($10,000 × 0.045) / 365 = $1.23 per day
Monthly interest ≈ $1.23 × 30 = $36.99
Interest is typically credited to the account at the end of each month. Some institutions credit quarterly.
HISA vs. Standard Savings Account
| Feature | Standard Savings Account | HISA |
|---|---|---|
| Typical interest rate | 0.01–0.5% | 3.0–5.5% |
| Minimum balance | Often $0–$500 | Often $0 |
| Fees | May charge monthly fee | Usually free |
| Branch access | Yes (Big 5) | Rarely (online-only) |
| CDIC insured | Yes | Yes |
| Debit card linked | Often | Sometimes (EQ Bank, Wealthsimple) |
| TFSA option | Yes | Yes |
| Lock-in period | None | None |
HISA vs. GIC
| Feature | HISA | GIC |
|---|---|---|
| Interest rate | 3–5.5% | 3.5–5.5% |
| Access to funds | Anytime | Locked until maturity |
| Rate stability | Variable (can change) | Fixed for term |
| CDIC insured | Yes | Yes (terms ≤5 years, CAD) |
| Best for | Emergency fund, short-term savings | Known future expense, conservative savings |
If rates are similar, the HISA wins on flexibility. If the GIC rate is meaningfully higher (0.5%+ more) and you don’t need the money, the GIC may be worth it.
Tax Treatment of HISA Interest
Non-registered HISA: Interest is taxed as ordinary income each year. The bank issues a T5 slip for interest of $50 or more. Add it to your T1 General under “interest and other investment income.”
TFSA HISA: Zero tax — ever. The best choice for emergency funds and short-term savings goals if you have TFSA contribution room.
RRSP HISA: Tax-deferred. Useful for cash held temporarily in an RRSP while deciding on longer-term investments.
When a HISA Is the Right Choice
A HISA is ideal when:
- You need the money within 12 months or at an unpredictable time (emergency fund)
- You want guaranteed principal (no market risk)
- You want competitive interest without committing to a fixed term
- You’re waiting to deploy capital into other investments (e.g., saving for a home purchase but unsure of timing)
A HISA may not be the right choice when:
- You don’t need the money for 1–5 years (a GIC usually offers a higher locked-in rate)
- You want long-term wealth growth (equities outperform savings accounts over 10+ years)