Canada’s 20 Best Online Savings Accounts for 2024
Nov 21, 2024The best online savings accounts have high interest rates and low or no fees. These bank accounts are offered by virtual, online-only banks.
ALSO CONSIDER: Best high-interest savings accounts | Best high-interest TFSAs | Best high-interest RRSPs | Best savings accounts
Online savings accounts are online bank accounts that earn interest, offered by virtual banks and online-only financial institutions in Canada. Account-holders manage and access their money through digital banking, mobile apps and by phone.
New clients get 5.35% with a Motive Savvy Savings® account for 120 days. Then, continue earning at their standard 3.20%* rate. Special offer available until November 30, 2024 for eligible new clients. Click "Apply Now" for details.
The best online HISAs in Canada
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Product detailsSummary of our selections
Best online HISAs
Simplii Financial™ High Interest Savings Account
Tangerine Savings Account
Motive Savvy Savings Account
KOHO Spending and Savings Account
PC Money Account
EQ Bank Personal Account
WealthONE High Interest Savings Account
Best online TFSA HISAs
Tangerine Tax-Free Savings Account
WealthONE Tax-Free Savings Account
Canadian Tire Tax Free® High Interest Savings Account
Saven Financial TFSA
Motive Financial TFSA Savings Account
Achieva Financial TFSA Daily Interest Savings Account
Steinbach Credit Union TFSA Variable Savings
Outlook Financial TFSA High-Interest Savings Account
Best online RRSP HISAs
Tangerine RSP Savings Account
WealthONE RRSP Savings Account
Saven Financial RRSP
Achieva Financial RRSP Savings Account
Outlook Financial RRSP High-Interest Savings Account
MAXA Financial RRSP Savings
Steinbach Credit Union RRSP Variable Savings
Methodology
NerdWallet Canada selects the best online savings accounts based on several criteria including annual percentage yields, minimum balances, fees, digital experience and more. Only savings accounts from online-only banks that are available in more than one province are considered for this list.
New clients get 5.35% with a Motive Savvy Savings® account for 120 days. Then, continue earning at their standard 3.20%* rate. Special offer available until November 30, 2024 for eligible new clients. Click "Apply Now" for details.
Things to know about online savings accounts
By Barry Choi
Opening a savings account online is nothing new since many traditional financial institutions offer digital banking. But online-only banks are far from traditional, and the savings accounts they offer are different in some important ways. Understanding the difference matters since it can mean more money in your account.
What is an online savings account?
When Canadians talk about online savings accounts, they’re usually referring to savings accounts offered by online-only banks. These virtual banks were introduced to the Canadian market more than two decades ago and were appealing due to the high interest rates that they offered.
These days, there are more digital banks in Canada and interest rates have dropped, but the debate about which online savings account is the best continues.
Basically, an online savings account is just a bank account that you can only access digitally. As in, the bank has no physical branches. Almost all transactions and customer service requests are done online or by phone.
The appeal of online savings accounts is the much lower fees (usually no fees). Since there are fewer overhead costs for these banks, the savings are passed on to consumers in the form of higher interest rates and fewer fees.
» LEARN: How free and no-fee bank accounts can help save you money
Types of online savings accounts
The types of online savings accounts available will depend on which financial institution you’re using. Generally speaking, the following are the most common types of accounts:
High-interest savings account (HISA), personal account
HISA, joint account
Hybrid accounts, which combine chequing account privileges with a HISA interest rate
US dollar savings account
» DISCOVER: How to make a joint bank account work for you
What to expect from online savings accounts
Interest rates
Online savings account interest rates can fluctuate quite a bit as they’re tied to the Bank of Canada’s overnight rate. In the last few years, interest rates for most online bank accounts have fluctuated between 1% to 3%. While that may not seem like a high interest rate, it’s significantly higher than the standard rate offered by bricks-and-mortar savings accounts.
Online savings accounts may offer an even higher promotional interest rate for certain customers, which will be applied for a limited time.
The interest you earn is usually presented as an annual percentage yield, but the interest is usually calculated daily and paid back into the account monthly. This compounding interest will help your savings grow faster.
Just remember, interest rates are subject to change without notice, so make sure to check your account statements so you know how much you’re actually earning.
» MORE: How does compound interest work?
What you get with an online-only bank account
The features offered by your online-only bank will differ depending on where you have things set up, but it’s common to see the following:
No monthly fees.
No minimum balance requirement.
Free bill payments.
Free electronic fund transfers.
International transfers.
The ability to direct deposit.
The ability to link your account to a bricks-and-mortar account.
Note that not all of these features may be available with an online savings account. But some digital banks also offer online bank accounts with chequing features, physical cheques, guaranteed investment certificates, credit cards, and debit cards.
What you don’t get with an online-only bank account
Since digital banks operate almost exclusively online, you likely won’t get anything that would normally happen in-person at a bricks-and-mortar location such as:
Face-to-face customer service.
Immediate access to cash if you don’t have a debit card.
Immediate access to bank drafts.
A safety deposit box.
Access to investment advisors.
Access to a wide range of banking services.
Currency exchange services.
Examples of online-only financial institutions
When looking for the best online savings accounts, you’ll get a lot of choices in Canada. Some of the most popular online-only financial institutions include:
Alterna Bank
KOHO
Motive Financial
motusbank
Neo
Oaken Financial
PC Financial
Online-only banks offer similar services and interest rates, but specific features vary. The main point is that they usually pay more interest than brick-and-mortar banks.
Online-only banks that are a division of a traditional bank
What some people may not realize is that many traditional banks own online-only banks. For example:
Scotiabank owns Tangerine
Canadian Imperial Bank of Commerce owns Simplii Financial
Median Credit Union owns motusbank
Home Trust owns Oaken Financial
Laurentian Bank of Canada owns LBC Digital
Even though a major financial institutions own digital banks, they operate as separate entities. That said, they do share resources at times. For example, if you’re a Tangerine customer, you can use Scotiabank ATMs to access cash immediately. However, you wouldn’t be able to walk into a Scotiabank branch to get customer service.
While it may seem odd for traditional banks to also own online-only banks, it’s a smart move. Online banks have built up a huge customer base over the years. Many of these people use online banks exclusively. By acquiring or creating an online bank, traditional banks get access to these customers. They can send them targeted offers or create new products based on collected data.
» Ready for a new bank?: Here’s how to make the switch
How to choose an online savings account
Choosing the best online savings account can be difficult since they can share many similarities. That said, there are a few things to look out for:
The interest rate. Generally speaking, most people will sign up for whichever online savings account offers the best interest rate. They’re also not afraid to transfer their money to another bank if there’s a better offer.
Bonus offer interest rate. Some online-only banks offer a higher interest rate during a promotional period.
Debit card availability. Some customers prefer to go with an online bank that gives you a debit card so you can access cash from an ATM as you need it.
Brand name and reliability. Although all online banks are safe and secure with some sort of deposit insurance, some people will prefer to use an online-only bank that’s owned by a bricks-and-mortar financial institution.
Referral bonus. Some online savings account providers may give you a bonus when you sign up with a referral link. You could then refer your friends where you’d both get a bonus.
How to open an online savings account
Opening an online savings account is easy. You just need to meet the following eligibility requirements before you get started:
You must be a Canadian resident.
You must be the age of majority in the province or territory where you reside.
You must have a Social Insurance Number.
Some online banks will also ask you to verify your identity by providing an image of your government-issued ID.
With all of that in hand, you would go to the website of the online bank you want to join to set up your accounts. Note that it could take a few days to verify all of your information. It also takes a few days if you’re going to link any external bank accounts to your new online bank account.
How to use an online savings account
How you use your online savings account will depend on your personal preferences. Some people will choose to maintain just one savings account, while others may open multiple bank accounts — within the same bank or at different banks. They might have different accounts for a home down payment, vacations, and an emergency fund, for example.
If you need to withdraw funds from your online savings account, or move it between bank accounts, it should be fairly easy to do via the website or app, just make sure you’re aware of any transaction limits or fees that may be charged.
» Make the most of what you earn: How to save money in 8 easy steps
Frequently asked questions
Are online savings accounts worth it?
Are online savings accounts worth it?
Online savings accounts pay more interest compared to brick-and-mortar savings accounts. Plus, online banks typically charge no fees, so there’s no reason not to sign up. Think of online banks as a complement to your existing bank account. In some cases, it could be a suitable replacement.
What’s the difference between online savings accounts and brick-and-mortar savings accounts?
What’s the difference between online savings accounts and brick-and-mortar savings accounts?
When referring to an online savings account or high interest savings accounts, most Canadians will associate them with virtual banks. Savings accounts available at brick-and-mortar financial institutions are just another type of bank account available to you.
» MORE: Canada’s Best High-Interest Savings Accounts for 2024
How does online-only banking work?
How does online-only banking work?
Online-only banking is very similar to an online banking account with a bricks-and-mortar financial institution. The major difference is that online-only banks have no physical branches, though some online-only banks may have a few physical offices.
Online-only banking still allows you to accept direct deposits, pay bills, and transfer funds. You just need to do it online on your computer or via a mobile device
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