Types Of Savings | Savings Strategies | HSBC Canada (2024)

Account type Instant access savings accounts (also called Savings Account or Demand Deposits) Instant access savings accounts (also called Savings Account or Demand Deposits) Key features
Fast or immediate access to your money, but the interest rates offered are often very low. Fast or immediate access to your money, but the interest rates offered are often very low. Good for?
Money you don’t need for day to day expenses, but that you might need at short notice for emergency or unexpected expenses. Money you don’t need for day to day expenses, but that you might need at short notice for emergency or unexpected expenses. Account type Regular or basic savings account
Regular or basic savings account
Key features
Often come with rules about minimum monthly deposits, or maximum withdrawals, but may offer a slightly higher interest rate in return. Often come with rules about minimum monthly deposits, or maximum withdrawals, but may offer a slightly higher interest rate in return. Good for?
Putting aside a proportion of your monthly income. Putting aside a proportion of your monthly income. Account type Fixed rate savings (also called GIC’s or term deposits) Fixed rate savings (also called GIC’s or term deposits) Key features
Better interest rates than a regular savings account. Your money is ‘locked in’ and inaccessible for a fixed period of time, from a few days to several years. They usually require a minimum investment, and there will be a penalty for securing early access to your money. They offer higher interest rates than many other savings accounts. Better interest rates than a regular savings account. Your money is ‘locked in’ and inaccessible for a fixed period of time, from a few days to several years. They usually require a minimum investment, and there will be a penalty for securing early access to your money. They offer higher interest rates than many other savings accounts. Good for?
Depositing funds that you know you aren’t going to need for a while; can also be suitable for meeting longer term savings goals. Depositing funds that you know you aren’t going to need for a while; can also be suitable for meeting longer term savings goals. Account type Government backed savings (Tax-Free Savings Account – TFSA) Government backed savings (Tax-Free Savings Account – TFSA) Key features
Good for?
TFSAs are a great way to save. Your money grows faster because income and capital gains are tax-free. Plus, they encourage you to start saving early to meet the demands of the future without having to worry about taxes on your earnings and withdrawals. TFSAs are a great way to save. Your money grows faster because income and capital gains are tax-free. Plus, they encourage you to start saving early to meet the demands of the future without having to worry about taxes on your earnings and withdrawals. Account type Investments
Investments
Key features

Comes with the risk that you might not get back what you invest. But if you’re able to set your money aside for 5 years or more, investing in mutual funds or shares has the potential to make your money work harder than it would in a savings account.

We explain the pros and cons of investing money in more detail here.

Comes with the risk that you might not get back what you invest. But if you’re able to set your money aside for 5 years or more, investing in mutual funds or shares has the potential to make your money work harder than it would in a savings account.

We explain the pros and cons of investing money in more detail here.

Good for?
Setting aside money you're not going to need for years, such as your retirement savings. Setting aside money you're not going to need for years, such as your retirement savings.