Interest rates on savings account differ from one bank to another. Interest rates could be as low as 0.5% to as high as 2.5%. Interest rates are commonly compounded on day to day basis, i.e. the interest rate is divided by the number of days during the year to get the “daily interest rate”. The interest earned in a savings account is usually paid at the end of every month. Depending on the policies regarding the savings account, there are some banks that require minimum balance in the account for it to earn interest. Base on the interest rate offered, the minimum balance needed for the savings account to earn interest and other fees, we shall choose the best savings account offered by three of the largest banks in Canada: Royal Bank of Canada (RBC), Bank of Montreal (BMO), and TD Canada Trust Bank.
Analyzing the figures from the table, it is quite clear that Royal Bank of Canada offers the best interest savings account available since it gives the highest interest rate without requiring any minimum balance in the account. Premium Rate Savings Account from BMO would also be a good choice if you regularly do debit transactions since it offers same interest rate with RBC eSavings (only if you can maintain account balance of $60,000) and a much smaller debit fee.
- BMO Financial Group. “Bank Accounts.” 17 November 2008 <http://www4.bmo.com/personal/rates/0,4481,35649_3507279,00.html?pChannelId=0>
- Howstuffworks, Inc. “How do savings account work.” 17 November 2008 <http://money.howstuffworks.com/personal-finance/budgeting/savings-accounts.htm>
- Royal Bank of Canada website. “RBC High Interest eSavings Account.” 17 November 2008 <http://www.rbcroyalbank.com/products/deposits/e-savings.html>
- TD Group Financial Services Site. “Compare our Savings Accounts.” 17 November 2008 <http://www.tdcanadatrust.com/accounts/compare_savings.jsp>