How To Move Your Money To A High-Interest Savings Account 

How To Move Your Money To A High-Interest Savings Account 

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated September 6, 2022

Saving money is one of the best ways to build yourself a stable financial future. Having that kind of financial security is particularly important in the event you lose your job or experience some sort of financial emergency. Unfortunately, it can be somewhat difficult to find a bank or credit union that offers a satisfactory interest rate on their savings accounts these days. 

If your current savings account doesn’t have a good rate, you might want to consider switching to another financial institution that offers a high-interest savings account. Read this and learn how to move your money to a high-interest savings account. 

Steps On How To Move Your Money To A High-Interest Savings Account 

Never be too hasty when choosing a savings account. Remember to research various accounts so you can obtain one that has all the features you want. Once you’ve found a savings account that you’re happy with, follow these steps to move your money into it: 

Step 1. Open Your Savings Account

While a good interest rate is essential, the other conditions of a savings account are equally important, like its maintenance and penalty fees. With a bit of comparison shopping, you may also be able to score sign-up bonuses, such as waived fees and bonus interest rates.   

Step 2. Transfer Your Money 

After you choose your new bank account, moving your money to it should be relatively simple. Generally, there are two ways to do this:

  • Direct Method – Sign-in to your old bank account, withdraw your savings and deposit them into your new account. Watch out, some banks charge fees for this type of service. It’s usually an easy transaction but confirm that with your bank/union before closing your account, just to be sure.       
  • Contact Your Bank – Alternatively, you can speak with your bank, ask them to close your savings account and transfer your funds to another. This could result in similar processing fees but is relatively easy to do. Do note, that it may take a few business days for your savings to be transferred. 

Step 3. Confirm The Closure Of Your Old Account

Unless you’re holding onto your account for some reason, you can ask your bank to deactivate it. This way, you won’t be subject to inactivity fees or billing errors later on. Making copies of any contracts or other paperwork involved can help you avoid those problems. 

Documents Required To Open A New Savings Account 

To register you for a new savings account, your bank must first verify your identity. Many financial institutions will require you to be a citizen or permanent resident of Canada, which most people can prove using their passports or driver’s licenses. If you don’t have access to those types of permits, these other government documents are accepted:

  • SIN (Social Insurance Number) card given by the Government of Canada
  • Canadian birth certificate
  • Certificate of Naturalization or Canadian Citizenship 
  • Permanent Resident card
  • Immigration, Refugees and Citizenship Canada (IRCC) form 

Will My Credit Be Affected By Switching Savings Accounts?

Your credit will not be affected by switching savings accounts, however, your credit can be affected if your account is not in good standing. Before you close your current savings account, don’t forget to deal with any outstanding balances, fees or penalties, as they could have a negative impact on your credit score if they continue to go unpaid. 

How To Choose A New Savings Account 

As mentioned, research is key if you’re moving money from one savings account to another, since the new account could have costs and features you’re not prepared for. Here are some of the main factors to consider when choosing a new savings account: 

Look At The Savings Account Fees

Some banks will tack on lots of maintenance, withdrawal and processing fees to manage your new savings account but might agree to waive them if you:

  • Keep a specific minimum daily or monthly balance in the account
  • Open a linked chequing account (with the same bank)
  • Sign up for recurring automatic transfers (to your savings account)    

Find Our The Savings Account’s Interest Rate

Your interest rate is a major factor because it determines how much extra money you can make on your savings. Shop around with a variety of big banks and smaller online financial institutions to learn everything you can about what constitutes a ‘high’ interest rate for a savings account in Canada.   

Is There A Minimum Balance? 

 Depending on where you apply for your savings account, you could be subject to some pretty hefty fees if you don’t maintain a specific monthly or daily balance. That said, many banks (especially smaller online ones) now offer tax-free savings accounts (TFSA) packages with zero monthly fees. 

Are There Transaction Limits

Some banks also impose limits on the transactions you can make with your savings account, like deposits, transfers and withdrawals. Going over those limits may be impossible or could lead to a penalty, so always confirm this with your banker and read the conditions of the savings account beforehand.

Where Can You Get A High-Interest Savings Account? 

Nowadays, big banks aren’t the only places to get a savings account. They may not even be the best places to find high-interest rates. There are plenty of credit unions, online banks and alternative finance companies that provide savings accounts with much better rates, as well as promotions to attract new clients.

These smaller institutions are generally able to offer higher interest rates because they have fewer overhead costs than big banks and can charge lower service fees. Just keep in mind that most promotional rates expire after a certain period, so make sure your standard rate is worth it too. Plus, some transactions, like bank drafts and money orders, might take more time with alternative banks.

Best High-Interest Savings Accounts

The following savings accounts have no monthly fees and come with high-interest rates. 

Interest Rate
Neo Money Account2.25%*
Scotiabank Momentum PLUS Savings Account– Up to 4.25% (limited time offer)
– 1.25% standard interest rate
CIBC eAdvantage Savings Account– Up to 4.25% (limited time offer)
– 1.00% standard interest rate
Tangerine Savings Account1.00%
Alterna Bank High eSavings Account 1.50%
EQ Bank Savings Account Plus2.00%*
*Interest is paid monthly and calculated daily on the total closing balance. Rates are subject to change without notice

FAQs On Switching Savings Accounts

How much money should you keep in your savings account?

This really depends on how your bank operates. For example, if your current savings account has a minimum required balance, you’ll have to maintain it in order to access the best interest rates. Keeping anything lower than that limit in your account could result in service fees. If you don’t have enough money to put in a higher-interest savings account, it may be a better idea to store your funds in an account with a lower yield until you can switch.     

Should I change banks to get a higher savings rate?

Unless your new bank is offering you a higher interest rate than your old savings account, switching accounts might not be worth the hassle. That said, many alternative financial institutions now have great promotional and standard interest rates on their savings accounts, which is especially beneficial if you plan to transfer a large balance to them. As long as the process isn’t too inconvenient or expensive, changing banks for a higher interest rate on a new savings account can definitely be a smart and profitable decision. 

Can my savings rate change?

All savings rates are subject to change from time to time. While that change might not be huge, it’s still a risk you have to take into account when switching savings accounts. Some savings rates are also ‘introductory’ and will drop to the industry average after around 3 to 6 months. Even your standard interest rate may change occasionally, as banks use several factors to calculate their rates. For example, if the economy takes a dip, so could interest rates.

Bottom Line

The earlier you move your money to a high-interest savings account, the more interest you’ll earn over time. Moreover, the easier it will be to buy a home, a car or retire in the future. Just remember to compare interest rates, shop around with different banks and consider all factors prior to signing any contracts.

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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