Savings are an extremely underrated aspect of personal finance even though it's arguably one of the most important. While there are a plethora of ways to save money, a method that is not always talked about is the high-interest savings account, or HISA for short.

What is a high-interest savings account? 

A high-interest savings account is a specific type of savings account that can allow you to store your money and earn more interest over time. While normal savings accounts can have an interest rate of about 0.05%, HISA’s interest rates can reach up to 2%, depending on the account. HISA’s also can offer more flexibility with your money for a similar rate of returns compared with GIC’s for example. A high-interest savings account can have a similar rate of return to a GIC, but in order to withdraw money from a GIC, you’ll have to break your contract. HISA’s, on the other hand, might only charge a fee for withdrawal. Furthermore, a high-interest savings account is a much safer investment to other assets with comparable rates of return, like bonds or stocks. Of course, there are several things you should consider when choosing a HISA that is most right for you and your financial goals.

1. Minimum Deposit

Several HISA’s will require a minimum deposit, and for you to keep it there. For some accounts, the higher the balance in your account --- the higher the interest rate.

2. Monthly Fees

While there are usually no monthly fees associated with HISA’s, there can definitely be fees associated with withdrawals or other transactions that can really add up. Typically, you will have a limit of various transactions that can be made, including monthly withdrawals and transfers. If you are looking for an account that you can make many withdrawals, you should be considering a checkings account instead, as HISA’s can get very expensive if you don’t use them properly.

Still not convinced? A HISA is a great place to store an emergency fund, in case something happens. It’s also a great way to save up to your financial goals, no matter how big or how small. If you are looking to get serious about your savings, and don’t know what to do, a high-interest savings account is a great option to start. Always be sure to do your research first, so that you can find the best HISA for you. Good luck saving!