Best Cash ETFs in Canada

What a cash ETF actually is

A cash ETF is an exchange-traded fund that holds very short-term, low-risk instruments — typically deposits at Canadian banks, high-interest savings accounts, or short-term money-market securities. It trades on the TSX like any stock, so you can buy or sell it during market hours inside your existing brokerage account.

The goal is capital preservation plus a yield that roughly tracks short-term interest rates. The unit price of a HISA-style cash ETF is designed to stay near a stable value while paying out interest monthly; a money-market ETF's price can wiggle slightly more but is still very low-risk.

These funds are not CDIC-insured the way a bank deposit is. The underlying deposits may be at insured banks, but the ETF wrapper itself is a security, not a guaranteed deposit.

Well-known Canadian cash ETF providers

Several major Canadian ETF issuers offer cash or HISA ETFs. You don't need to memorize tickers — the point is to know the category and compare within it.

• Purpose Investments, CI Global Asset Management, Horizons/Global X, and the big-bank asset managers (such as those affiliated with the major banks) all offer cash or high-interest savings ETFs.
• Some funds hold a spread of deposits across several banks; others focus on money-market instruments.
• All aim for a similar outcome — a competitive, savings-like yield — so differences come down to fees, structure and yield mechanics rather than dramatically different strategies.

Because these are broad, well-known products from established issuers, focus your comparison on cost and how the yield is generated rather than brand alone.

How to choose between cash ETFs

The funds look similar on the surface, so a few practical factors separate them.

• Management fee: cash ETFs generally charge a low management fee. A smaller fee leaves more yield in your pocket, and on a low-return product every basis point matters.
• Yield mechanics: understand whether the fund holds bank deposits (HISA-style, very stable price) or money-market securities (may fluctuate slightly).
• Liquidity: all trade on the TSX, but check that the fund is large and actively traded so spreads are tight.
• Broker commissions: if your broker charges per trade, frequent buying and selling of a cash ETF can eat into the modest yield.

Avoid fixating on today's advertised yield — it moves with interest rates. A low fee and a sound structure matter more over time.

Cash ETF vs GIC vs savings account

Each option trades off yield, access and safety differently.

• Savings account: fully liquid and often CDIC-insured, but the best rates may be at online banks; branch accounts often pay little.
• GIC: locks your money for a term in exchange for a guaranteed rate; principal is protected and insured, but you sacrifice access.
• Cash ETF: liquid, buyable inside a brokerage account alongside your other investments, with a competitive yield — but no deposit insurance on the wrapper and a small management fee.

A cash ETF shines when you want your 'safe' money in the same account as your stocks and ETFs, or a place to hold dry powder between investments without moving cash out of your brokerage.

Taxes and where to hold a cash ETF

The distributions from a cash ETF are typically interest income, which is fully taxable at your marginal rate in a non-registered account. That makes account location important.

• In a TFSA, the yield is completely tax-free — a natural home for a cash ETF.
• In an RRSP or FHSA, distributions grow sheltered.
• In a non-registered account, expect a T3 slip and fully taxable interest.

Because the income is interest, not dividends, holding a cash ETF in a registered account is usually the most tax-efficient choice for Canadians.

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