You've got some money. A few hundred dollars from summer shifts, or birthday cash that's been sitting somewhere, waiting. Maybe you're saving for something specific and you want it somewhere it won't disappear.
So now what?
Most teens do one of two things: they leave it in a chequing account where it earns almost nothing, or they leave it at home where it earns nothing at all. A savings account is a small step that actually makes a difference. Here's what to look for and how to pick one.
Chequing vs. Savings: Not the Same Account
If you already have a bank account, it's probably a chequing account. That's the one connected to your debit card. Money comes in, money goes out. It's built for spending.
A savings account works differently. You keep money there that you don't plan to spend right now. The bank pays you interest for letting them hold it. You can still access the money whenever you need it, but the whole point is to let it sit and grow.
The interest rate on a savings account is almost always higher than on a chequing account. On most chequing accounts, the rate is zero.
That difference matters more than it sounds.
What to Look For in a Teen Savings Account
A few things are worth checking before you open anything.
No monthly fee. Some accounts charge you just for having them. A few dollars a month might not sound like much, but on a balance of $300, a $4 monthly fee wipes out most of your interest. Look for an account with no maintenance fee, or one that waives the fee when you maintain a minimum balance (just make sure you can actually hit that minimum).
No minimum balance, or a very low one. If the account requires you to keep $500 in it to avoid fees and you only have $200, it is the wrong account for you right now. Most youth accounts at the big banks have no minimum balance at all.
A reasonable interest rate. Honest expectation: you are not going to get rich from the interest on a teen savings account. On $500 at 2% interest, you earn $10 in a year. The real value is the habit of separating your spending money from your saving money. As the balance grows, so does the interest.
Easy to open. If you are under 18 in Canada, most banks will ask a parent or guardian to co-sign. That is completely standard. You can go to a branch together, bring ID, and be done in under an hour.
Canadian Options Worth Knowing About
The big five banks in Canada (TD, RBC, Scotiabank, BMO, and CIBC) all offer youth savings accounts designed for this exact situation. The names vary (TD Every Day Savings, RBC Day to Day Savings, and so on), but the structure is similar: no monthly fee, little or no minimum balance, and a modest interest rate.
The upside of going with your current bank is convenience. If you already have a chequing account there, a savings account sits right beside it and transfers between the two are instant.
Online banks often offer better rates. Banks like EQ Bank, Tangerine, and Simplii Financial have no physical branches. Their savings rates are frequently higher than what you would find at the big five. The catch: the sign-up process is fully digital, and some require you to be 18. If you are 16 or older and comfortable managing things online, it is worth comparing.
One important note: do not make your decision based on rates you read in any article, including this one. Rates change constantly. Check the bank's website directly, or use the savings account comparison tool at ratehub.ca, which shows current rates across Canadian banks side by side.
Questions to Ask Before You Open One
Walk into a branch or pull up the bank's website knowing what to ask:
- Is there a monthly fee? Under what conditions?
- What is the current interest rate?
- Is there a minimum balance I need to maintain?
- If I am under 18, does a parent need to be on the account?
- Can I transfer money easily between my chequing and savings?
You are allowed to ask these questions. Bank staff answer them all day long without any judgment. You can also find most of this on the bank's website before you go in.
What Interest Actually Looks Like on a Small Balance
If you put $400 into a savings account earning 2% interest, you earn $8 in a year.
That is worth having. It is not life-changing.
The reason to open a savings account at 15 or 16 is not to get rich from interest. It is to build the habit of keeping your saving money separate from your spending money. That separation is the skill. The interest is a bonus.
Here is what changes over time. As your savings grow, you earn interest on a bigger number. Then you earn interest on that interest too. That is compound interest, and it is quiet and slow at first. But ten years from now, the habit you start this year will have had time to do something real. Most adults wish they had started earlier. You actually can.
Your Next Step
This week, pick one.
If you already have a chequing account at a bank, go online or call to ask whether they offer a youth savings account. If they do, open it and move whatever you can into it right now.
If you do not have any bank account yet, talk to a parent about going to a branch together to open your first account. Bring your ID. It takes about an hour.
Start with what you have. The perfect savings account is the one you actually open.