Where to keep your savings
Not all savings are the same. Money you'll spend next week belongs somewhere very different from money you won't touch for a decade. The trick is matching each goal's time horizon to the right account so you earn what you can without risking cash you'll soon need.
Match the account to the time horizon
- Spending this month: a no-fee chequing account. Convenience matters more than interest here.
- Emergency fund and short-term goals (0–2 years): a high-interest savings account (HISA) — liquid, safe, and earning interest.
- Money with a known date (1–5 years): a GIC, which locks in a guaranteed rate for a fixed term, often higher than a HISA in exchange for giving up access.
- Long-term goals (5+ years, like retirement): invested in a TFSA or RRSP, where growth potential outweighs short-term volatility.
Keep reading: High-interest savings accounts · GIC providers. For the official rules, see CDIC — your coverage.
HISA vs GIC
A HISA keeps your money accessible and its rate floats with the market. A GIC pays a guaranteed rate but locks your money for the term (cashable GICs trade some rate for flexibility).
Use a HISA for money you might need on short notice; use a GIC — or a GIC ladder, where you stagger several terms — for money you're confident you won't touch until a set date.
Don't forget the tax wrapper
Where you hold savings matters as much as which account. Interest from a HISA or GIC is fully taxable in a non-registered account, but tax-free inside a TFSA and tax-deferred inside an RRSP or FHSA.
For most people, filling TFSA room with your savings and investments is the simplest way to keep more of what you earn.
Frequently asked
Are HISAs and GICs safe?
At a CDIC-member bank, eligible deposits — including most GICs and savings accounts — are protected within CDIC limits. Credit unions are covered by provincial insurers. Confirm coverage with the institution.
Is a GIC better than a HISA right now?
It depends on the rate gap and whether you can lock the money away. If a GIC pays meaningfully more and you won't need the cash before the term ends, it can be worth it; otherwise a HISA's flexibility often wins.
Sources
General information for Canadian readers, not individualized financial, tax or investment advice. Figures reflect the date reviewed; confirm current limits and rules with the CRA or a qualified professional before acting.