High-interest savings account

High-interest savings accounts (HISA) are bank accounts offering a rate higher than traditional daily savings accounts. In Canada, there are two types of HISA, a savings account offered by financial institutions such as banks (including virtual banks) and credit unions and fund-based investment savings accounts offered by discount brokerages. HISAs can be used for a cash allocation in a portfolio, or for cash reserves such as an emergency fund.
==Conventional high-interest savings accounts==
===History===
Conventional HISAsRed Flag Deals, High Interest Savings Accounts, viewed Dec. 26, 2011. are bank accounts offering a rate higher than traditional daily savings accounts. These high-interest accounts are generally considered to have been introduced in Canada by ING Canada, now Tangerine, in 1997, which was one of the first "virtual banks" (with no branches), and offered significantly greater interest than the savings accounts then offered by major banks. Several other providers entered the market later. 
===Popular choices===
Regular rates
The following table lists examples of online banks popular on the for their HISAs with regular 'high' rates:
Institution 	Owned by 	CDIC coverage and membership
Alterna Bank 	Alterna Savings, an Ontario credit union	Yes
Canadian Tire Bank 	Canadian Tire Corp () 	Yes
EQ Bank 	Equitable Group Inc () 	Yes
Manulife Bank 	Manulife () 	Yes
LBC Digital 	Laurentian Bank () 	Yes, part of Laurentian BankCDIC Deposit-Insurance, viewed October 19, 2021.
Motive Financial, previously Canadian Direct Financial	Canadian Western Bank () 	Yes, part of Canadian Western BankMotive Financial - FAQs, viewed January 29, 2018.
Oaken Financial 	Home Capital Group () 	Yes, two separate entities: Home Bank and Home TrustCDIC – Oaken Financial, viewed July 2, 2020.
Peoples Trust 	Privately owned 	Yes
These institutions also typically offer Tax-Free Savings Accounts (TFSAs) and often Guaranteed Investment Certificates (GICs). While these are all CDIC insured institutions, there are also online high-interest savings accounts offered by divisions of Manitoba credit unions, covered by provincial deposit insurance. 
Another sometimes mentioned option for Quebec residents is "Épargne Placements Québec", an administrative unit of the provincial finance ministry. Their HISA-like "flexi-plus savings" product can be competitive with the online banks.
Promos
The following institutions are also often mentioned on the forum. They typically have lower regular HISA rates but often run promotions:
Institution 	Owned by 	CDIC coverage and membership
Simplii Financial, previously PC Financial	CIBC () 	Yes, part of CIBCCIBC, CDIC Deposit Insurance Information, viewed December 20, 2017.
Tangerine 	Scotiabank ()	Yes
If you want to deal with these institutions offering promos, you might need another HISA from a bank offering better regular rates, to use while you wait for the next promo.
===The big banks strike back===
Traditional institutions now offer similar plans, although they often have minimum balance requirements or transaction fees designed to prevent them from being a direct replacement for a general savings account. The following list contains links to savings account options, including HISAs, at the big-6 Canadian banks:
* BMO savings accounts
* CIBC savings accounts
* National Bank savings accounts
* RBC savings accounts
* Scotiabank savings accounts
* TD savings accounts
The account sponsor should be contacted for the details on establishing the account, transferring funds, account minimum, deposit insurance and other requirements.
===Current rates===
Current rates for many HISA accounts can be found at Cannex or Canadian high interest savings account: Comparison chart. The latter indicates which accounts are available in Quebec and which institutions are credit unions.
===Limitations===
Although these accounts may be suitable for normal savings account use, some of them are not eligible for use in a Registered Retirement Savings Plan (RRSP), nor are they convenient for holding day-to-day funds at brokerage accounts, and the Investment Savings Accounts mentioned below are an alternative for those purposes.
==Fund-based investment savings accounts==
Fund-based investment savings accounts (ISA) are alternatives to money-market fund (MMF), offered by many deposit-taking institutions.Canadian Capitalist, High-Interest Savings Accounts at Canadian Brokers, viewed May 14, 2022.Canadian Couch Potato, Parking Cash in Your Portfolio, October 12, 2010 (updated October 2020), viewed May 14, 2022. They trade as if they were mutual funds - that is, they are bought or sold as fund units, usually of $1 or $10 value - but actually represent a CDIC-insured savings account. Settlement date is T+1; that is, the business day after the trade. 
These accounts can be used to park cash temporarily in brokerage accounts, including registered accounts, and are also suitable as a place to deposit emergency funds. However, some brokers may not offer all ISAs, or impose additional fees or conditions if the fund is not one of the brokers' own fund family. This may have the effect of restricting the investor's choice to a small group or a single fund. Nonetheless, for small investors they are often more convenient than Guaranteed Investment Certificates or Treasury bills.
A list of some of the applicable funds is given below; note that the fund identification codes in the first column are for "class A" funds which are typical. Some brokers are now offering "class F" funds which have better yields because they don't have embedded commissions; see the comments column.
Prospective investors should confirm fund availability, minimum purchase, and any fees (including penalty fees if the fund is sold within 90 days, which apply at some brokerages) with their brokerage before purchase. Some of this information may be available if the fund identification code (e.g., "RBF2010") is entered into the mutual fund selection box. 
Several issuers offer similar funds from different corporate entities (e.g. XYZ Bank versus XYZ Trust), which likely have separate CDIC coverage (check the member list to confirm).Dan Bortolotti, A better place to park your clients’ cash, Advisor's Edge, April 30, 2013, viewed May 15, 2022. However, accounts from the same corporate entity would be combined for deposit insurance purposesCDIC communications post on Financial Wisdom Forum, viewed July 3, 2013..
CAD Fund Symbol 	USD Fund Symbol 	Fund Sponsor 	Comments
ATL5000ATL5002ATL5004 	ATL5500 	CIBC and affiliates including Renaissance 	Try ATL5001 (F class)
BMT104BMT109BMT114 	BMT124BMT129BMT134	Bank of Montreal and affiliates 	-
BTB100 	 	B2B Bank 	Try BTB101 (F class)
CIB327 CIB328 	 	[https://www.cibc.com/en/personal-banking/investments/mutual-funds/savings-funds.html Savings Funds | Mutual Funds | CIBC]	The F class funds are available at other discount brokerages such as TD Direct Investing
DYN3054DYN3064DYN3074DYN5000DYN6000	DYN5001DYN6001 	Scotia Bank and affiliates 	No-fee in Scotia Itrade accounts, where they represent the only choices; try DYN6004, DYN3055, DYN3065, and DYN3075 there (F class)
EQB1000ETR1000 	EQB1100 	Equitable Bank / Trust 	Try EQB1001 (F class)
HOM100HOB100 	 	Home Trust / Bank 	Try HOB101 and HOM101 (F class)
IBN100 	IBN200 	ICICI Bank 	Not available for registered accounts or TFSAs
MIP510MIP710 	MIP511 	Manulife Bank / Trust 	Try MIP610 and MIP810 (F class)
NBC100NBC6100NBC8100 	NBC101 	NBI Altamira (National Bank and affiliates) 	Try NBC200, NBC6200, NBC8200 (F class)
RBF2010 RBF2020RBF2030RBF2040 	RBF2014 	Royal Bank and affiliates 	No-fee in RBC Direct Investing accounts, where they represent the only choices; try RBF2011, RBF2021, RBF2031, RBF2041 (F class)
TDB8150TDB8155TDB8159 	TDB8152 	TD Bank and affiliates 	No-fee in TD Direct Investing accounts, where they represent the only choices; try TDB8151, TDB8156, TDB8158, TDB8160 (F class)
Mr Thrifty maintains a similar list with current interest rates.
As securities priced under $3 are not marginable, HISA funds with a $1 unit value cannot be used as collateral for margin. On the other hand, ISA funds with a $10 unit price generally have a loan value of 95%, consistent with money market funds.
==See also==
*Cash and cash equivalents
*Short term cash returns
*Tax-Free Savings Account
==References==
==Further reading==
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* 
* 
==External links==
* Canadian high interest savings account: Comparison chart, includes current rates for a number of institutions
* Globe and Mail, The DIY investor’s guide to the best places for parking cash in an online broker account
* List of banks and credit unions in Canada
Category:Financial management
Category:Cash management
Category:Personal finance
Category:Account types