Savings accounts are a good place to save for short-term goals or keep cash for emergencies. Once you’ve built up some savings, look at other options for making your money earn more. You can open a savings account at most banks, trust companies, and credit unions.
How savings accounts work
Deposits – You can deposit any amount of money at any time. Your employer may be able to deposit your pay directly into your account.
Withdrawals – You can get money out of the account easily and quickly by using a debit card, withdrawing cash at a bank machine (ATM) or withdrawing cash through a bank teller. There may be daily limits on how much you can withdraw.
Interest – You will earn some interest on the money in your account. Savings accounts usually pay slightly more interest than you would get in a chequing account. You may get a higher interest rate if you keep more than the minimum balance in your account.
Fees – Fees vary, depending on the type of account you choose.
CDIC protection – Your money is protected, up to set limits, through the Canada Deposit Insurance Corporation (CDIC). This doesn't apply to U.S. dollar accounts.
Other things to consider
Low return – Your money will earn interest in a savings account, but probably not as much as in some other, low-risk investments. It also may not keep up with inflation.
Fees – You may be charged high fees for making transactions.
Interest is fully taxed – Learn more about how investments are taxed.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca
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