Is a high yield savings account the same as a HISA in Canada?
You searched for a high yield savings account and every bank calls it something different. Good news: the label matters less than five things you can check in minutes.
What the names mean
CDIC describes a HISA as an account that can offer a higher interest rate than a regular savings account and can grow your savings without locking in for a specific term. There is no separate legal category for "high yield" in that description, so treat the two phrases as the same idea and read the product details. Our basics guide, what is a HISA, covers it in more depth.
Five things to compare
- The rate, and whether part of it is a promotion. Ask what the rate is after any intro period ends.
- Conditions. Minimum balances, withdrawal fees or transfer limits.
- Deposit insurance. CDIC says HISA deposits may be eligible at a CDIC member institution, up to $100,000 per category. HISA ETFs and HISA mutual funds are not protected.
- Tax. Interest in a regular account is taxable. See is HISA interest taxable.
- The account wrapper. A TFSA can hold a savings product tax-free. See TFSA vs HISA.
A small rate gap, in dollars
| Example (illustrative) | Account A | Account B |
|---|---|---|
| Balance | $10,000 | $10,000 |
| Rate | 2.5% | 3.0% |
| Interest in a year | $250 | $300 |
| Tax at 30% (non-registered) | $75 | $90 |
| You keep | $175 | $210 |
The half-point gap is worth $35 after tax on $10,000 in this made-up case. Rates can change, so a slightly higher rate today is not a guarantee of anything later. A balance in your chequing account earning nothing is the bigger leak for many people, and our money leaks guide helps you find it.
Common mistakes
- Chasing the top rate and ignoring the conditions. A rate that needs a large balance or a lot of activity may not fit your life.
- Assuming every product is insured. Insurance depends on the institution and the product, so confirm before you move money.
- Moving money too often. Each switch costs time, and a transfer in the wrong place can leave cash idle for days. Before you move, check your current account's fee schedule and your options.
- Forgetting the tax. The rate on the website is before tax unless the money sits in a registered account.
How to confirm insurance
CDIC links to a list of its member institutions. Check that the institution is on it, and ask which product you are opening. See our CDIC guide for the category rules.
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