The One Inflation Calculator That Protects Your Money

If you don’t already have a high-interest savings account (HISA), now is a good time to consider opening one. HISAs pay significantly more interest than standard savings accounts, and current rates are especially attractive. Higher returns on your deposited cash can help offset some of the impact of inflation, and many banks are offering appealing welcome promotions for new accounts.

To put it in context: in December the year-over-year inflation rate in Canada was 6.3%, and prices for everyday items like groceries and gas remain elevated. Inflation erodes the buying power of a dollar, so finding a safe place that yields higher returns is worth considering. The Bank of Canada has raised interest rates several times to help curb inflation. While that makes borrowing costlier, it also means savers can now earn better rates on deposit accounts.

High-interest savings accounts typically pay more than regular savings accounts, so your balance can grow faster while remaining readily accessible. A HISA is a practical option whether you’re saving for a specific purchase, building an emergency fund, or simply want to earn a little more on cash you’re not investing long term.

How high-interest savings accounts work

A high-interest savings account functions like a regular savings account but pays a higher interest rate. Interest is usually calculated daily and paid monthly. Although HISA rates might not fully offset inflation, they can help preserve more purchasing power than a standard savings account.

You can open a HISA at a traditional bank, an online bank, a credit union or a fintech. Unlike locked-in products such as bonds or a guaranteed investment certificate (GIC), HISAs typically let you access your money whenever you need it, making them flexible for short-term goals and emergency savings.

What to look for in a high-interest savings account

Not all HISAs are the same. If you plan to deposit a lump sum, set up automatic transfers, or rely on promotional rates, compare accounts on three main criteria: rate, fees, and deposit insurance.

1. Interest rate

Regular (non-promotional) HISA interest rates typically range from very low single digits to a few percent, while standard savings accounts often offer rates near zero. Promotional rates can be substantially higher but usually apply only for a limited time—often a few months—and sometimes only on eligible deposits. Currently, some institutions are offering especially generous promotions; for example, Simplii Financial has offered promotional rates that far exceed its standard 0.30%–1.50% range for new accounts during introductory periods. Always check the length of the promotion and how and when the bonus interest is paid.

2. Fees and minimums

Some savings accounts charge transaction fees for withdrawals, transfers or bill payments. These fees can erode the benefit of a higher interest rate if you access the money frequently. Monthly fees are less common for HISAs, but some institutions require a minimum balance to avoid fees. If you prefer no-fee banking, look for accounts that explicitly waive transaction fees and have no minimum balance requirement.

3. Deposit insurance (CDIC eligibility)

Check whether the institution is a member of the Canada Deposit Insurance Corporation (CDIC). CDIC protects eligible deposits up to $100,000 if the member institution becomes insolvent, providing added security for your savings. Many traditional banks and several digital banks participate in CDIC—Simplii Financial’s HISA deposits, for example, are CDIC insured. Confirm coverage details before opening an account.

Why open a high-interest savings account?

Beyond earning more interest, a HISA helps you separate everyday spending from money earmarked for specific goals. Use a HISA to save for a trip, tuition, a down payment, or to build an emergency fund. Setting up automatic transfers from your chequing account—monthly or on each payday—makes saving effortless and helps you stay on track.

If you’re saving for a goal, calculate the target cost first. Then determine how much you can realistically set aside each month by subtracting your expenses from your income. Divide the total cost by your monthly savings to estimate how long it will take to reach your goal. This simple budgeting step creates a realistic timeline and helps you avoid unnecessary debt while saving.

You can open multiple HISAs if you want to track different goals separately—one for emergencies, another for travel, and another for a down payment. Compare interest rates, promotional offers, fees, and insurance to choose the best place for each savings goal.

Read more about banking:

• Is your chequing account working hard enough?
• What the Bank of Canada’s latest overnight rate hike means for your finances
• What is an emergency fund and how to build one
• Does buying GICs still make sense after the recent rate changes?