How do I open a high interest savings account in Canada?

Opening a high interest savings account (HISA) is usually quick. Most of the work is choosing the account, not filling in the form. Here is what to have ready and what to read before you click submit.

What you need to open one

Identity documents

The Financial Consumer Agency of Canada (FCAC) says you need original ID, not photocopies. One route is two documents from a reliable source, one with your name and address and one with your name and date of birth. Another is one document with your name and date of birth plus confirmation of who you are from a customer in good standing or a person of good standing in your community. You can usually open an account in person, online or by phone. See what to bring to open a bank account for more.

Your Social Insurance Number

The Office of the Privacy Commissioner says banks, credit unions and similar institutions are required under the Income Tax Act to ask for your SIN for tax reporting on interest-earning accounts. The reason is that interest is taxable income, as covered in is HISA interest taxable?.

An account to link

FCAC notes online-only institutions may ask you to hold an account at another institution first. That linked account is how you send and withdraw money.

What to read before you apply

FCAC suggests asking about fees, charges and interest rates, and whether your deposits are protected by deposit insurance. Your bank must give you fee information when you open an account and must send changes in writing. Keep a copy of the agreement. If you want the basics of the product first, start with what a HISA is.

• Insurance. Check the institution is a CDIC member or covered by a provincial insurer.
• Rate details. Ask whether the advertised rate is a base rate or a temporary promotion, and when it changes.
• Fees. Look for monthly, withdrawal or transfer fees in the fee schedule.

Why fees can cancel a bigger rate

A higher rate is not always better once a fee is subtracted. Illustrative numbers on a $5,000 balance for one year, using simple interest:

These are made-up rates for arithmetic only. Real rates change often, so check the account's own page. If fees are a worry, our hidden bank fees guide shows where to look.

The bottom line

Opening the account is the easy part. Before you move your savings, confirm the insurance, read the fee schedule, and ask whether the rate is a base rate or a promotion. Then set a reminder to review the rate every few months, since rates can change. A few minutes of reading up front is cheaper than discovering a fee on your statement later.

Comparing offers first? Our guide to the best high-interest savings accounts and how to compare rates has a promo vs everyday rate calculator.