High-interest savings account

High-interest savings accounts (HISA) are bank accounts offering a rate higher than traditional daily savings accounts. In Canada, there are two types of HISA, a savings account offered by financial institutions such as banks (including virtual banks) and credit unions and fund-based savings accounts offered by discount brokerages. HISAs can be used for a cash allocation in a portfolio, or for cash reserves such as an emergency fund.

History
Conventional HISAs are bank accounts offering a rate higher than traditional daily savings accounts. These high-interest accounts are generally considered to have been introduced in Canada by ING Canada, now Tangerine, in 1997, which was one of the first "virtual banks" (with no branches), and offered significantly greater interest than the savings accounts then offered by major banks. Several other providers entered the market later.

Popular choices
The following table lists examples of online banks popular on the for their HISAs:

These institutions also typically offer Tax-Free Savings Accounts (TFSAs) and often Guaranteed Investment Certificates (GICs). While these are all CDIC insured institutions, there are also online high-interest savings accounts offered by divisions of Manitoba credit unions, covered by provincial deposit insurance.

The big banks strike back
Traditional institutions now offer similar plans, although they often have minimum balance requirements or transaction fees designed to prevent them from being a direct replacement for a general savings account. The following list contains links to savings account options, including HISAs, at the big-6 Canadian banks:
 * BMO savings accounts
 * CIBC savings accounts
 * National Bank savings accounts
 * RBC savings accounts
 * Scotiabank savings accounts
 * TD savings accounts

The account sponsor should be contacted for the details on establishing the account, transferring funds, account minimum, deposit insurance and other requirements.

Current rates
Current rates for many HISA accounts can be found at Cannex or Canadian high interest savings account: Comparison chart. The latter indicates which accounts are available in Quebec and which institutions are credit unions.

Limitations
Although these accounts may be suitable for normal savings account use, some of them are not eligible for use in a Registered Retirement Savings Plan (RRSP), nor are they convenient for holding day-to-day funds at brokerage accounts, and the Investment Savings Accounts mentioned below are an alternative for those purposes.

Fund-based investment savings accounts
Fund-based investment savings accounts (ISA) are high-interest money-market fund (MMF) alternatives offered by some deposit-taking institutions. They trade as if they were mutual funds - that is, they are bought or sold as fund units, usually of $1 or $10 value - but actually represent a CDIC-insured savings account (if denominated in Canadian dollars). Settlement date is T+1; that is, the business day after the trade. These accounts can be used to store free cash in brokerage or registered accounts. However, some brokers may not offer all accounts, or impose additional fees or conditions if the fund is not one of the brokers' own fund family. This may have the effect of restricting the investor's choice to a small group or a single fund. Nonetheless, for small investors they are often more convenient than Guaranteed Investment Certificates or Treasury bills.

A list of some of the applicable funds is given below. Prospective investors should confirm fund availability, minimum purchase, and any fees (including penalty fees if the fund is sold within 90 days, which apply at some brokerages) with their brokerage before purchase. Some of this information may be available if the fund identification code (e.g., "RBF2010") is entered into the mutual fund selection box. Several issuers offer similar funds from different corporate entities, however those from the same corporate entity would be combined for deposit insurance purposes.


 * {| class="wikitable"

! style="text-align: center;"| CAD Fund Symbol !! style="text-align: center;"| USD Fund Symbol !! style="text-align: left;"| Fund Sponsor !! style="text-align: left;"| Comments
 * style="text-align: center;"| AAT770 ||style="text-align: center;"|AAT780 || Bank of Montreal || -
 * style="text-align: center;"| ATL5000 || || Renaissance (CIBC) || -
 * style="text-align: center;"| BTB100 || || B2B Bank || -
 * style="text-align: center;"| DYN500 ||style="text-align: center;"|DYN400 || ADS Canadian Bank || No-fee in Scotia Itrade accounts, where they represent the only choices
 * style="text-align: center;"| IBN100 ||style="text-align: center;"|IBN200 || ICICI Bank || Not available for registered accounts or TFSAs
 * style="text-align: center;"| MIP510 MIP710 ||style="text-align: center;"|MIP511 || Manulife Bank Manulife Trust || -
 * style="text-align: center;"| NBC100 ||style="text-align: center;"|NBC101 || Altamira (National Bank) || -
 * style="text-align: center;"| RBF2010 RBF2020 RBF2030 RBF2040 ||style="text-align: center;"|RBF2014 || Royal Bank RBMC RT Corp RT Co || No-fee in RBC or RBC Direct Investing accounts, where they represent the only choices
 * style="text-align: center;"|TDB8150 TDB8155 TDB8157 TDB8159 ||style="text-align: center;"|TDB8152   || TD Bank TDMC TDPMC CTC || No-fee in TD Direct Investing accounts, where they represent the only choices
 * }
 * style="text-align: center;"| MIP510 MIP710 ||style="text-align: center;"|MIP511 || Manulife Bank Manulife Trust || -
 * style="text-align: center;"| NBC100 ||style="text-align: center;"|NBC101 || Altamira (National Bank) || -
 * style="text-align: center;"| RBF2010 RBF2020 RBF2030 RBF2040 ||style="text-align: center;"|RBF2014 || Royal Bank RBMC RT Corp RT Co || No-fee in RBC or RBC Direct Investing accounts, where they represent the only choices
 * style="text-align: center;"|TDB8150 TDB8155 TDB8157 TDB8159 ||style="text-align: center;"|TDB8152   || TD Bank TDMC TDPMC CTC || No-fee in TD Direct Investing accounts, where they represent the only choices
 * }
 * style="text-align: center;"| RBF2010 RBF2020 RBF2030 RBF2040 ||style="text-align: center;"|RBF2014 || Royal Bank RBMC RT Corp RT Co || No-fee in RBC or RBC Direct Investing accounts, where they represent the only choices
 * style="text-align: center;"|TDB8150 TDB8155 TDB8157 TDB8159 ||style="text-align: center;"|TDB8152   || TD Bank TDMC TDPMC CTC || No-fee in TD Direct Investing accounts, where they represent the only choices
 * }
 * }

As securities priced under $3 are not marginable, HISA funds with a $1 unit value cannot be used as collateral for margin. On the other hand, ISA funds with a $10 unit price generally have a loan value of 95%, consistent with money market funds.