Savers Roundup January 2024: Your savings account can beat inflation

Rewind to January 2023: the headline inflation number in Canada was 6.3% (from December 2022). The highest savings account interest rates on our comparison chart were Ontario-only Saven Financial at 3.75%, Oaken Financial at 3.40%, and Outlook Financial at 3.35%.

Today, Ontario-only Saven Financial leads the pack at 4.15%, followed by Motive Financial at 4.10%, and a trio of options at 4.00%: Neo Financial, Wealth One Bank of Canada, and Wealthsimple. You can even get 4.00% at EQ Bank if you set up direct deposit, or up to 4.75% in a brokerage investment savings account. Savings account interest rates increased modestly in 2023, but the year-over-year inflation number from December 2023 was 3.40%; thus your humble savings account can currently beat inflation! How’s that for some good news to start off 2024?

The beginning of the year signals TFSA and RRSP season, including another $7,000 of TFSA contribution room. If you’re looking for a short-term strategy, check our promotions page, with new promos this month for as high as 5.75%.

GIC rates have peaked; how will 2024 go?

GIC rates appear to have peaked in November and December. More than half of the financial institutions we track decreased their GIC rates in the first two weeks of January. Furthermore, the Bank of Canada governor says that the key interest rate will decrease at some point in 2024.

Shorter-term GICs are still offering better rates than longer-term GICs. 8 financial institutions on our GIC comparison chart will give you at least 5.40% on a 1-year term right now, whereas last year, the 1-year leader was a single financial institution at 5.30%. The 4-year and 5-year GIC rates are lagging behind, but you can still get 5.00% at Wealth One Bank of Canada, and slightly higher if you use a GIC broker.