All about the High Interest Savings Account
Learn what a High Interest Savings Account is and how it compares to other saving options.
By ATB Financial 16 February 2023 3 min read
What is a High Interest Savings Account (HISA) and how does it compare to other savings options? We break down four common account types so you can choose the best option for you. Let’s look at the HISA, Personal Cashable GIC, Springboard Savings Account and Tax Free Saver Account.
High Interest Savings Account
- A High Interest Savings Account offers higher interest rates than traditional chequing or savings accounts.
- Your original investment and interest are fully guaranteed through ATB Financial’s Deposit Guarantee.
- Available to Alberta residents 18 years or older through an ATB Wealth advisor.
- Can be held in a variety of ATB Wealth accounts, including Registered Retirement Savings Accounts (RRSP), Tax Free Savings Accounts (TFSA) and taxable investment accounts.
- Funds aren’t locked-in and can be redeemed within one business day.
- There’s a minimum investment of $1,000.
- Can be held in individual or joint accounts.
A HISA is similar to a Cashable GIC (Guaranteed Investment Certificate). A GIC is a guaranteed or risk-free investment that can be held in ATB or ATB Wealth accounts including RRIF, TFSA, RESP or RRSP. GICs generally provide a higher interest rate compared to a typical savings account, but also have lower return potential than higher-risk investment options like stocks, bonds or a mix of the two.
Let’s look at one of our popular GIC products for comparison.
- Term can be from one to five years.
- The minimum investment is $100 for Generation Account holders. For all other investors, $500 for registered investments and $1,000 non-registered. Registered investments, like RRSPs, aren’t taxed.
- GICs can be joint accounts with another person.
- To open a cashable GIC, you must go into a branch, call us or reach out to your ATB Wealth Advisor.
- GICs pay a fixed-interest rate that usually delivers a higher return than a typical savings account.
- The initial investment amount and interest earned are guaranteed.
- A variety of different terms and redemption options can be selected based on an investor’s unique goals and circumstances.
- Learn about potential GIC drawbacks.
Now let’s compare traditional single account types.
Springboard Savings Account
- A Springboard Savings Account has no minimum investment and allows you to earn increased interest the more you invest.
- Easily access your funds.
- You get one free withdrawal a month from an ATB Automated Banking Machine (ABM). After one withdrawal, fees apply. You have unlimited deposits and transfers.
- Springboard Savings Accounts can be a joint account.
- A Springboard Savings Account can be set up online.
Tax-Free Saver Account
- A Tax-Free Saver Account is a way to accumulate money over a period of time and contribute to your Tax-Free Savings Account (TFSA). The interest you earn on your saved money is tax free.
- With a TFSA, your contributions are not tax deductible—that means you’ve already paid tax on them. The benefit of a TFSA is that your investment earnings and withdrawals are tax-free going forward, so your growth is never taxed.
- Since you don’t have to pay tax when you withdraw from your TFSA, you can easily access your funds any time.
- A Tax-Free Saver Account cannot be a joint account.
- You can withdraw funds from your ATB Tax-Free Saver Account any time. You can only replace all or part of those funds in the same calendar year if you have remaining contribution room. Otherwise you’ll have to wait until the next calendar year when the contribution room is re-calculated.
- The Tax-Free Saver Account is open to anyone 18 years of age or older with a valid Canadian social insurance number (SIN).
HISA, Personal cashable GIC, Springboard Savings Account and Tax-Free Saver Account comparison at a glance
|Account||Minimum investment||Interest earned||Monthly fees||Cashability||Requires advisor support|
|High Interest Savings Account||$1,000 for Series A and F||See current rates||No fees||Trade +1 business day (purchase and redemption)||A wealth advisor is required|
|Personal cashable GIC||$100, $500 or $1000||See current rates||No fees||Yes, see product page for details||No, but must be opened in a branch or over the phone.|
|Springboard Savings Account||$0||See current rates||$0||One free transaction per month and additional debits are subject to fees.||No|
|TaxFree Saver Account (TFSA)||$0||See current rates||No fees||Withdraw at anytime||No, but must be opened in a branch or over the phone.|
ATB Wealth® (a registered trade name) consists of a range of financial services provided by ATB Financial and certain of its subsidiaries. ATB Investment Management Inc. and ATB Securities Inc. are individually licensed users of ATB Wealth. ATB Securities Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.
The information contained herein has been compiled or arrived at from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness, and ATB Wealth (this includes all the above legal entities) does not accept any liability or responsibility whatsoever for any loss arising from any use of this document or its contents. This information is subject to change and ATB Wealth does not undertake to provide updated information should a change occur. This document may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions and conclusions contained in it be referred to without the prior consent of the appropriate legal entity using ATB Wealth. This document is being provided for information purposes only and is not intended to replace or serve as a substitute for professional advice, nor as an offer to sell or a solicitation of an offer to buy any investment. Professional legal and tax advice should always be obtained when dealing with legal and taxation issues as each individual’s situation is different.
* The bonus offer is available on net new funds deposited into a new or existing Springboard Savings Account, TFSA Account or RRSP Daily Interest Account between January 9 and June 30, 2023. Interest will be calculated daily and paid out monthly. Tax implications may be associated with this offer. This offer is subject to change without notice and cannot be combined with other offers.