High Interest Savings Account (HISA)

A HISA is a savings account that offers a higher interest rate than the standard savings account at your bank. Your money earns interest daily and is typically paid out monthly. Unlike a GIC, your money isn’t locked in. You can usually withdraw it anytime without penalty.

How it works

HISAs are offered by most Canadian banks, credit unions, and online banks. Rates vary, but online banks and credit unions tend to offer better rates than the big five banks. Some HISAs require a minimum balance to earn the advertised rate, while others don’t.

You can hold a HISA inside a TFSA or RRSP, which means the interest you earn can be tax-sheltered. In a non-registered account, the interest is fully taxable at your marginal tax rate.

There are also HISA ETFs, which are exchange-traded funds that hold deposits at multiple banks. These can be bought through a brokerage and often offer competitive rates.

Why it matters

A HISA is a good place for money you want to keep safe and accessible. Emergency funds, short-term savings goals, or cash you’re planning to invest later all fit well here. The interest rate won’t make you rich, but it keeps your money working instead of sitting idle. If your current savings account pays close to 0%, even moving to a HISA earning 3% to 4% can make a meaningful difference on larger balances.

A concrete example

Say you keep $15,000 as an emergency fund. In a regular savings account paying 0.05%, that earns you $7.50 per year. Move it to a HISA paying 3.75%, and you earn $562.50 instead. Same money, same accessibility, $555 more in your pocket each year.