Scotia Bank Savings Account Review | Is It the Right Pick or Are There Better Options?

November 8, 2022 | Editorial Team

Scotiabank Savings Accounts

If you live in Canada, you have likely heard of Scotiabank. Scotiabank is one of Canada’s Big Five Banks. These are the five biggest banks in Canada; BMO, TD, CIBC, RBC and Scotiabank. As Scotiabank is so well-known, they are a reliable choice for all of your banking needs.

Scotiabank has plenty of branches across Canada for those who prefer in-person banking. If that’s not for you, Scotiabank also has a great online banking platform.

If you are looking to make a low-risk investment or simply want to start saving, opening a savings account with Scotiabank may be a good place to start. In this article, we will go over the five savings accounts that Scotiabank has to offer. No matter what your saving needs are, Scotiabank has something for you! Let’s dive into the Scotiabank accounts.

MomentumPLUS Savings Account

The first Scotiabank savings account we’re going to discuss is the Momentum PLUS savings account. Although the regular interest rate is not the highest saving account interest, the Momentum PLUS savings account has many benefits.

There is no minimum balance required and no fees to maintain the account. Self-service transfers are free and unlimited. Scotia international money transfers are also free and unlimited with the Scotiabank Momentum PLUS savings account.

Savings Accelerator Account

The Scotiabank Savings Accelerator account is another great option. There is one main difference between the Scotiabank savings Accelerator account and the Momentum PLUS account. This account is available in tax-free savings accounts as well as other registered plans.

The interest rate is also higher with the Scotiabank Savings Accelerator account.

Money Master Savings Account

With the Scotiabank Money Master savings account, you can take advantage of the Scotiabank Bank the Rest program. With this program, every purchase made with your Scotiabank debit card will benefit. Scotiabank will round up your purchase to the nearest $1 or $5. The extra will be added to your Money Master savings account balance. This will help you earn more interest in the long run.

Scotia U.S. Dollar Daily Interest Account

If you are looking to open a foreign currency savings account, Scotiabank offers a great US dollar account. It has a low monthly fee, and it can be waived if you have a small balance. Scotiabank offers competitive exchange rates. You can also easily make transfers between this account and a Canadian dollar account. Lastly, you will receive two debit transactions for free every month.

Scotia Euro Daily Interest Savings Account

Scotiabank also helps customers who deal in Euro. There is also a monthly fee with this account. To benefit from an interest rate, you need a higher balance with this Scotiabank account.

With the Scotiabank Euro Daily Interest savings account, you receive two free, teller-assisted withdrawals every month. If you need more, you will have to pay a fee.

The Best Alternative to a Scotia Savings Account

EQ Bank Savings Accounts

Another great online bank in Canada is EQ Bank. EQ Bank is the ninth-largest bank in Canada, so their services are known to be reliable. This bank only offers one account, savings account with the highest interest. The interest rate offered is 1.50%, one of the highest savings account interest rates in Canada.

EQ Bank offers no minimum balance and no fees, so you can focus solely on saving. You can also open a joint savings account with EQ.

Tangerine Savings Accounts

If you are looking to open a savings account with an online bank instead of with Scotiabank, Tangerine is a great option. Tangerine is actually owned by Scotiabank, so you get the same great service conveniently online. Tangerine offers five different savings accounts.

The first is a basic savings account. The second is a tax-free savings account. The third is a retirement saving plan account. The fourth is a US dollar savings account, and the last is a RIF savings account. All five are great options as there are little to no fees and a decent interest rate for each.

How to Pick the Best Savings Account for You

What is a Savings Account?

A savings account is a type of account that helps consumers save money. You deposit any amount of money into your account to keep it safe. There, it will benefit from a higher interest rate than chequing accounts receive.

In exchange for a higher interest rate, it tends to be harder to access your savings account balance. Transactions will be limited, or you will have to pay to make them. Similarly, you may be required to retain a certain balance in your account. Otherwise, you may have to pay a fee, or you may not benefit from the interest rate.

Most people thus have a chequing account and a savings account. The chequing account is for daily transactions, while the savings account is simply to save.

How Do Savings Accounts Work?

You may be wondering why banks such as Scotiabank are willing to offer the highest interest on savings account. This is because banks or credit unions use your savings account’s balance. They will loan out your money to other customers who will, in turn, pay them a high-interest rate for the loan. This means the bank or credit union is able to earn money from your balance.

This does not mean that you won’t be able to access your money when you need it. You can take it out the entire balance at any time, you will likely just have to pay a fee. Fees for savings accounts vary depending on the bank. When opening a savings account, it is best to look at the fees and the interest rate you will receive.

Types of Savings Accounts

In Canada, there are three main types of savings accounts available. A high-interest account, a tax-free account, and an RRSP account.

A high-interest savings account is exactly as it sounds, a savings account that has a high-interest rate. This will help you earn money without having to do anything. It is a low-risk investment as you are guaranteed to earn without risking your money. Any interest you earn from your account balance will be taxed. To avoid this, you could instead open a tax-free savings account.

A tax-free account allows you to earn interest on your balance that will not be taxed. There is a yearly limit that you can deposit to this type of account called a contribution limit. If you go over your contribution limit, you will be taxed 1% of your balance every month. Interest rates tend to be lower with this account, but you may be able to save more money tax-free.

The last account type is a Registered Retirement Savings Plan (RRSP) account. It is a government-run program that has been around since 1957. It is meant to encourage Canadians to save for retirement. Any money you contribute to this account will be exempt from your income taxes the year you contribute. You will later have to pay tax on the balance when you withdraw it.

Why You Need a Savings Account

If you already have a chequing account, you may be wondering if you even need a savings. Chequing accounts are great for daily use, but you will earn little to no interest on your money. With savings accounts, your money could just be sitting there, and it will still earn interest. Passive income is one of the best ways to earn money because you don’t even need to lift a finger.

Similarly, you never know when you will need money. Having a savings account will encourage you to save for a rainy day. You can access your savings accounts much easier than investments such as stocks or bonds.

Which Type of Savings Account is Right For Me?

As we have discussed each Scotiabank savings account and savings accounts in general, you may be wondering which type is the best for you. The answer depends on what your savings goals are. If you simply want to benefit from receiving interest, a high-interest account is the best option.

If you want to start saving for retirement, an RRSP is the best option. You can contribute a small amount yearly to withdraw in retirement. This is more of a long-term saving option.

As an RRSP tends to be long-term, many people open one in conjunction with a TFSA. You won’t be taxed on any interest you earn in your TFSA, so it can be a great account for short-term and long-term needs. Many people use it to make investments, as the money they earn will be tax-free.

What Is The Difference Between a Savings Account and a Chequing Account?

The main difference between savings and chequing accounts is how you can use them. Chequing accounts are made to be used for everyday transactions. They come with a debit card for you to use anywhere, such as at stores and restaurants. Using your debit card is typically free, and there tends to be little to no fees with a chequing account.

Savings accounts, however, are not meant to be used daily. People tend to deposit a certain amount and let the balance of the account simply earn regular interest. Savings accounts tend to have much higher interest rates than chequing accounts but can be more restrictive.

Withdrawing, transferring, or any other transaction may come with a fee. You may also have to maintain a certain balance each month or pay a fee if you don’t.

Most people tend to have both savings and chequing accounts. This allows you to set aside money to save while also using a portion of your balance as you see fit.

Common Savings Account Fees

If you have been looking into a Scotiabank savings account or other accounts, you may have noticed a list of fees. Most savings accounts have fees to justify a higher interest rate. Here are a few of the common ones.

  • Monthly fee: this fee is used to maintain your account. Typically, the most this fee will be is $5 a month. It can often be waived if you meet a certain balance. For example, the US Dollar Scotiabank savings account will waive the $1 monthly fee if you have $200.
  • Transaction fees: transactions such as transferring money or withdrawing it may incur a fee. Most banks will offer a number of free transactions a month. Some accounts offer an unlimited amount. Transaction fees typically range from $1 to $5.
  • Minimum balance: some savings accounts require you to meet a certain balance. If you don’t retain that balance, you may have to pay a fee. It ranges from $1 to $15. Similarly, many of the Scotiabank savings accounts require you to meet a certain minimum balance to earn interest.

The Bottom Line

Now that you know everything there is to know about savings accounts, you should feel ready to open your own! As we discussed, Scotiabank has five great options to suit whatever your banking needs are. If you prefer a general savings account, the Momentum Plus, Accelerator, or Money Master account are all great options. Their interest rate is a bit low, but the more you save, the higher your interest rate will be!

If you are looking to save USD, the Scotiabank U.S. Dollar Daily Interest account is a great option. Similarly, Scotiabank offers accounts to save Euros, the Euro Daily Interest account.

You may instead prefer a strictly online bank. Tangerine is a subsidiary of Scotiabank and is a great option. They offer five different savings accounts and can all be opened easily online. Similarly, EQ Bank offers no-fee, high-interest savings accounts. Both are great for those who don’t mind missing out on in-person banking.

It is never too late or too early to start saving, so opening savings accounts at any time is a great idea. Whether it’s for general saving, saving for retirement, or as an investment, a savings account is a safe bet. Your money will be held safely and insured by the Canada Deposit Insurance Corporation (CDIC).

Head over to the Scotiabank website now to book an appointment with a financial advisor or start your application. Don’t delay, save today!