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An epic standard in overpromising and underdelivering was reached when the big banks named their savings accounts.

Exploring this situation might help disgorge some of the billions sitting in these accounts instead of better alternatives. A fine place to start is Toronto-Dominion Bank’s TD-T High Interest Savings Account, which is shown on TD’s website as offering an interest rate of “0.000 per cent” on balances below $5,000 and 0.05 per cent on higher amounts. That’s not even high if you’re high when you read this.

So, maybe TD’s e-Premium Savings Account. Here, you get a reasonable 1.6-per-cent rate on savings of $10,000 and up. Thanks to a tiering system, lower balances get you zero interest.

Tiering is also used by Royal Bank of Canada RY-T on its RBC Day to Day Savings account. Interest is paid at 0.005 per cent below $1,000 and at 0.1 per cent above that. RBC’s High Interest eSavings is the better choice, with an across-the-board rate of 1.5 per cent. But calling 1.5 per cent high interest is only accurate in comparison with other big-bank offerings.

The best rate in savings as of May was the 4.1 per cent paid by Motive Financial, an online banking division of Canadian Western Bank and a member of Canada Deposit Insurance Corp. Ontario residents could get 3.6 per cent from Saven Financial, part of FirstOntario Credit Union. It may help your confidence level to know I have accounts at both Motive and Saven, among many other alternative banks. In total, about a dozen or so of these banks offered savings rates of 3 per cent or more as of early May.

Continuing our survey of big-bank savings accounts, we have Canadian Imperial Bank of Commerce’s CM-T eAdvantage Savings Account. What’s the advantage? It’s hard to tell, given that we have yet another example of tiering here that penalizes small balances.

Interest starts at 0.4 per cent for balances below $25,000 and then hits 1.4 per cent until you get to $500,000 and over, where a 1.6-per-cent rate applies. CIBC offers additional interest of 0.5 per cent on top of the regular rate if you save $200 or more in a month and have a balance up to $200,000.

Another bank to reward diligent savings is Bank of Nova Scotia BNS-T, through its Momentum Plus Savings Account. You get 1.4-per-cent regular interest plus extra interest of as much as 1.25 per cent if you leave money untouched for up to 360 days. Having a particular Scotiabank chequing account package adds another 0.05 per cent or 0.1 per cent, and then there’s a welcome bonus of 2.25-per-cent interest for the first five months. Scotiabank also has a Money Master Savings Account paying 0.01 per cent.

Still another offering for people who regularly add to their savings is Bank of Montreal’s BMO-T Savings Builder Account, which pays 2.5-per-cent interest on balances up to $250,000 if you increase your balance by $200 or more per month. If you stop adding money to the account, your interest rate falls to 0.5 per cent.

For a big-bank savings account that comes close to living up to its name, try BMO’s Amplifier Account. The interest rate is a clean 1.8 per cent, which is to say the bank hasn’t loaded it down with conditions.

Now for a quick summary of reasons why alternative-bank savings accounts are better than what the big banks offer:

  1. Better interest rates: easily double or better what some of the big banks offer
  2. No tiering – the rate is the rate
  3. No temporary rate promotions for the most part – the rate is the rate
  4. You can pay bills and send e-transfers from many of these accounts – big banks generally apply fees to any type of withdrawal other than transfers to your chequing account

If you have money in a big-bank savings account, check your interest rate right now. Don’t be suckered by the words premium or high interest in the name.

Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.

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