Canadians Paying Low Interest on Savings: Suze Orman's Challenge

Financial expert Suze Orman recently issued a challenge to Canadians, encouraging them to review their savings accounts and ensure they are earning a competitive interest rate. According to a Vanguard survey, over 70% of women feel confident about their ability to save, but nearly half are keeping their money in accounts paying less than 3%. In Canada's current interest-rate environment, Orman argues that 3% should be seen as the minimum target rather than an exceptional return.

The Bank of Canada held its overnight rate at 2.25% on July 15, with the deposit rate sitting at 2.20%. While these rates influence various financial products, they don't guarantee all banks will offer the same returns. If you're building an emergency fund or relying on interest income in retirement, every percentage point makes a difference over time.

Some savings accounts come with requirements such as maintaining a minimum balance, setting up recurring direct deposits, or limiting withdrawals. It's essential to compare your interest rate with other CDIC-insured savings accounts and consider the account features that suit your needs. Orman's challenge is about making sure the money you've already saved is working for you.