The Bank of Canada’s key policy rate and the prime rate at major banks are on hold, with forward markets – which reflect market-implied expectations for future policy rates –currently pricing in no material change to rates through the end of 2026.
Despite uncertainty surrounding U.S. economic policy – including President Donald Trump’s recent nomination of Kevin Warsh as the next Federal Reserve chair – the Canadian rate landscape has remained stable.
In this environment, promotional high-interest savings accounts continue to dominate short-term returns, while longer-term GICs from smaller, CDIC-insured institutions (or provincially guaranteed GICs) still offer the most attractive locked-in rates.
The best savings account promotional rate remains 4.65 per cent, offered by the Bank of Nova Scotia’s Momentum Plus account and available for three months, after which rates typically fall sharply. Royal Bank of Canada and the Canadian Imperial Bank of Commerce are tied for second at 4.6 per cent, but also limit it to three months.
Among non-promotional high-interest savings accounts, Saven Financial continues to offer the highest rate of 2.85 per cent. The second-highest rate of 2.8 per cent is provided by Oaken Financial. These continuing rates, offered by smaller institutions such as FirstOntario Credit Union (through its Saven Financial brand) and Home Bank (through Oaken Financial), reflect their reliance on retail deposits for funding and underline the importance of shopping around.
The Warsh nomination adds a layer of uncertainty to the North American rate outlook. While the former Fed governor has historically favoured higher interest rates to control inflation, he has recently signalled support for lower rates and appears aligned with the Trump administration’s desire for rate cuts.
As reported in The Globe and Mail, market participants are uncertain about how aggressively Mr. Warsh would push for rate cuts, given that he would hold only one vote among 12 on the Federal Open Market Committee.
For Canadian savers and investors, the implications are indirect but meaningful: aggressive Fed rate cuts could put downward pressure on the U.S. dollar and potentially push the Bank of Canada toward lowering rates as well, though Canadian policymakers have demonstrated a willingness to diverge from the Fed when domestic conditions warrant.
For now, with Canadian forward markets pricing in no material change to policy rates through year-end, the rate environment for savings accounts and GICs appears stable.
While promotional savings accounts remain attractive for short-term cash, investors willing to lock in funds can still find compelling value in the GIC market. The best five-year GIC rate is 3.85 per cent from Achieva Financial, while a group of CDIC- and provincially insured lenders offer 3.8 per cent.
Two-year GIC rates reach 3.8 per cent from Achieva Financial, while the best three-year rate is 3.7 per cent, offered by multiple providers. On one-year terms, WealthONE leads at 3.65 per cent, with Achieva Financial offering the second-best rate at 3.6 per cent. Many of these rates are also available in registered accounts such as TFSAs and RRSPs.
Interest rates are provided by WOWA.ca, which gathers, aggregates and freely disseminates data on mortgage rates, savings accounts, and GIC rates from 50+ Canadian financial institutions.
Ali Nassimi is a writer and content developer at WOWA.ca, a Canadian personal finance platform.
