The only inflation tool you need for your finances

2. What are the account fees?

Some high-yield savings accounts charge transaction fees, typically a few dollars per withdrawal, transfer, or bill payment that goes out of your account — it can really add up. It is less common for these accounts to charge a monthly fee as they are designed to store your money for a longer period of time. However, some banks or financial institutions require account holders to hold a minimum balance to avoid paying these monthly fees.

Other savings accounts, like those at Simplii Financial, don’t charge any fees for your transactions and don’t have minimum balance requirements to worry about.

3. Is the account eligible for CDIC insurance?

Before opening a new account, check if the bank is a member of the Canada Deposit Insurance Corporation (CDIC). If this is the case, CDIC will protect up to $100,000 in your savings in eligible accounts if the member institution becomes insolvent (extremely rare, but not impossible).

Traditional banks and credit unions aren’t the only financial institutions that are CDIC members—many digital banks are, too. For example, deposits in Simplii Financial’s High Interest Savings Account* are insured by CDIC. National research company Ipsos has recognized Simplii as one of the most recommended financial institutions of 2022 for offering the best value for money and an excellent mobile banking experience.

Another reason to open a high-yield savings account

You may be wondering, “Do I really need another bank account?” In addition to the reasons above, a HISA can help you separate your daily expenses from the money you’re saving for a financial goal, such as getting your money back. B. a trip, paying tuition, or increasing your emergency fund. For example, you can set up automatic transfers from your checking account to your HISA once a month or after each payday. It will feel rewarding to watch the balance grow.

If you’re saving for something, figure out how much you’ll have to pay for it. Then calculate how much money you can set aside each month by subtracting your expenses from your income. (Quick tip: the next time you log into your online bank account, export your recent transactions to a spreadsheet.) Now divide the cost of your future purchase by the amount you can save each month to see , how long it will take to hit your target. Saving for a vacation or a down payment on a house will help you create a realistic schedule that shouldn’t put you into debt.

A high-yield savings account is a great option for saving for a financial goal or for the added security of having an emergency fund. (To have a goal And Do you want an emergency fund? Open more than one HISA.) Be sure to check out the different account features and welcome offers to help you decide where to park your savings.

Read more about banks:

What does that mean?

If a link has an asterisk

In the end this means it is an affiliate link which can sometimes result in a payment to MoneySense (owned by Ratehub Inc.) which helps keep our site free for our users. It is important to note that our editorial content is never influenced by these links. We aim to review all available products on the market and where a product ranks in our article, or whether or not it ranks first, is never dependent on compensation. See our MoneySense monetization policy for more details.

Source link