The Money Reporter’s most recent survey of the best interest rates in Canada finds an online savings account offering 2.35 per cent with no minimum balance required and no monthly service fee.
High-interest savings accounts are probably the best place to put your short-term cash now. They generally offer the highest rates.
With the exception of Tangerine’s 180- and 270-day terms, term deposits generally offer lower rates than you can find on a high-interest savings account. But the 2.35 and 2.25 per cent that Tangerine pays on its 270- and 180-day deposits, respectively, are certainly competitive with the highest-paying high-interest accounts you can find. Problem is, you have to lock your money in with term deposits, whereas high-interest savings accounts give you the flexibility to withdraw your money when you need it.
Meanwhile, the money-market rates paid by treasury bills and bankers’ acceptances are not very competitive at all. You can get 1.58 per cent on a one-year treasury bill, or 2.08 per cent on a 180-day bankers’ acceptance. But the money-market rates we publish in this month’s survey involve a minimum deposit of $1 million. Hardly affordable for the small investor.
You don’t need millions to get a good rate
Such investors, however, can get a good deal on a high-interest savings account. The highest-yielding account we know of in this category is the Happy Savings account offered by Hubert Financial. It yields 2.35 per cent.
Hubert is an online financial institution, which keeps costs down and, therefore, lets it pay higher interest. It’s an online division of Sunova Credit Union, one of the top-100 credit unions in Canada. Manitoba-based Sunova has been in operation since the 1940s.
Hubert’s high-interest savings account is 100-per-cent guaranteed by the Deposit Guarantee Corporation of Manitoba, no minimum balance is required and there is no monthly service fee. All Canadians, excluding those in Quebec, who are over the age of 18 are eligible to open an account with Hubert.
Other high-interest savings accounts include EQ Bank and Wealth One Bank of Canada, both of which offer 2.30 per cent.
This is an edited version of an article that was originally published for subscribers in the October 19, 2018, issue of Money Reporter. You can profit from the award-winning advice subscribers receive regularly in Money Reporter.
Money Reporter, MPL Communications Inc.
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