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Do you understand your bank rates and fees? Canadians pay a huge sum in annual bank fees, and make pennies (if anything) on their savings be getting low rates from banks on their cash deposits. I believe the bank should be paying us! So my goal is to share with you the best high interest savings accounts in Canada and institutions that are going to pay you more than they are going to charge you!
Understanding Bank Rates and Fees
Most banks charge a ton of different fees just to be a customer. But you are actually doing the bank a favour by lending them your money in their bank, so they can go out and lend that to others. So why are WE the ones to pay in this situation? Banks should be paying us much higher interest for getting our money as deposits, not charging us ridiculous amount of fees instead.
This is the reason why I use an online bank. They actually pay YOU for the right to use your money.
Brick and mortar traditional banks are typically good investments, and are often included in many mutual funds and EFT’s… in part, because they make lots of money off the fees they charge their clients.
Fees you might encounter with traditional banks
- keep less than $4000 in your chequing account? Then pay a fee
- make too many transactions in a month with your own money? Thats a fee
- lowest rates possible for savings accounts (don’t make me laugh by calling them HISA’s)
- pressure to buy their investment products with high management fees that would eat away at your gains.
What ridiculous fees have you been charged by your bank?
Online or alternative banks
These institutions are legitimate options for your chequing and savings accounts. Make sure to check they are a CDIC member! These Institutions often pay interest. even on your chequing account, and offer much higher interest rates on savings accounts. Some features are:
- They provide better rates for High Interest Savings Accounts so your savings can grow faster.
- Usually have online and phone 24/7 support since there are no branches
- Have lower overhead since there is no brick and mortar to support and the savings is passed on to YOU!
What type of bank do you use? And why?
I use two of the higher interest rate offerings from online banks. EQ bank High Interest Savings account, and Neo Money which are two of the highest Interest Rates in Canada for High Interest Savings Accounts (HISA). I also use Tangerine for my every day checking account, and never pay any fees.
With inflation and the higher cost of living, we have to make our money stretch further. For the money you are not investing, park it in a high interest savings account, so at least you are earning some interest. Don’t let bank fees chip away at your money!
For more content like this, check the Finance and Investing section of the blog.