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Savings account basics

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

  1. 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.
  2. Fees – You may be charged high fees for making transactions.
  3. Interest is fully taxed – Learn more about how investments are taxed.
 

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