A HISA Promo rate is a sprint stapled to a marathon. The sprint is the headline: a high rate for the first few months. The marathon is the base rate your money actually lives at for the rest of the year. Blend the two and a 5% Promo lasting three months on a 1% base works out to 2.00% over a full year: $200 on a $10,000 deposit, less than half of what the sticker implied. (Those are illustration rates, not any bank’s current offer; the shape is what matters, and the shape is everywhere.)
One weighted average tells you when chasing savings account bonus interest pays and when a plain GIC wins.
The honeymoon math
The arithmetic takes one move: weight each rate by the fraction of the year it applies, then add. On a $10,000 deposit, with the illustration rates above:
- Months 1 to 3 at 5.00%: $10,000 × 5.00% × (3 ÷ 12) = $125
- Months 4 to 12 at 1.00%: $10,000 × 1.00% × (9 ÷ 12) = $75
- Year one total: $200, an effective rate of 2.00%
Notice where the weight sits. The base rate gets three quarters of the year, so the effective rate always lands much closer to the base than to the headline. Big-bank Promo periods typically run about 90 to 120 days, which is exactly short enough to keep the big number in the ad and out of your statement.
The same weighting works on any offer you’re handed. A richer illustration, 6.00% for four months on a 1.50% base, blends to 3.00%: $200 of teaser interest plus $100 of base interest on that same $10,000. Better, and still a long way from six.
What a Promo pays over a full year
The table prices the honeymoon against the real, flat rates on our boards as they stood on August 26. The two illustration Promos are ours, labelled as such; the two real rows are our own observations.
| Scenario | Year one on $10,000 | Effective rate |
|---|---|---|
| Illustration Promo A: 5.00% for 3 months, then 1.00% | $200 | 2.00% |
| Illustration Promo B: 6.00% for 4 months, then 1.50% | $300 | 3.00% |
| Promo-hopping, best case: 5.00% chained with 40 dead days (illustration) | $445 | 4.45% |
| Top of our HISA board: 2.75% flat (real, August 26) | $275 | 2.75% |
| Best 1-year GIC on our boards: 4.00% fixed (real, August 26) | $400 | 4.00% |
One caveat before the conclusions: our HISA coverage is thinner than our GIC coverage, so 2.75% (Lighthouse Credit Union) is the top of our HISA board rather than a verdict on every high-interest savings account in Canada.
A flat 2.75% with no expiry date beats illustration Promo A by $75 a year, without a single account switch or a calendar reminder. For a three-month teaser on a 1% base to match a 4.00% one-year GIC, the teaser would have to pay 13%; that’s algebra, not a forecast, and it explains why the GIC row is so hard to catch. Scale doesn’t rescue the shape either: on $50,000, Promo A earns $1,000 for the year while the GIC earns $2,000.
Strings, switching, and when a plain GIC wins
The fine print that does the heavy lifting
Promo offers on high-interest savings accounts in Canada tend to draw from the same small bag of conditions, and each one exists to shrink what the headline pays out:
- New clients only. The honeymoon is for people the bank has not met, which rules out repeating it where you already bank.
- Net new deposits. The rate often applies only to money above your prior balance, so existing savings sit at base.
- Paired accounts. Some offers require opening a chequing account too. A $15 monthly account fee, to pick a plausible number, is $180 a year, which would consume nearly all of Promo A’s $200.
- Relationship tiers. Some accounts pay little or nothing below a stated combined-balance minimum across the institution.
- Balance caps. The teaser may apply only up to a ceiling, with everything above it earning base from day one.
None of this is hidden, exactly. It lives in the linked terms, at the bottom, in the grey text. Our boards read the grey text so the rate you compare is the rate you’d earn.
The spreadsheet lifestyle
Could you chain teasers back to back and hold the high rate all year? In principle. In practice every switch costs days in transit and eligibility checks, and the offers have to keep existing exactly when you need them. Grant the hopper everything and dock only 40 dead days across the year: $10,000 at 5.00% for the remaining 325 days earns $445, an effective 4.45%. That’s the best case, with four qualifying offers landing in sequence and no dead months, and it clears the 4.00% GIC booked in one sitting by $45. A part-time hobby, paying about a dollar a week over doing nothing.
Where the plain GIC simply wins
For money that can sit untouched for a year, the comparison stops being close. The best 1-year GIC on our boards pays 4.00% (Brunswick Credit Union), fixed until maturity; the 2-year is 4.25%. The rate carries no expiry date and no eligibility window, and there’s no base rate waiting underneath it. Base rates, meanwhile, drift: on August 26 alone our boards logged five brands cutting rates and three raising them. A Promo chaser is exposed to that drift the day each honeymoon ends. On our boards, a Promo is labelled a Promo, one row per offer, so a teaser never masquerades as an everyday rate; our methodology explains how we classify them, and the GIC boards show what locking currently pays at every term. The broader GIC or HISA choice gets a full comparison of its own.
Run the blend first
Take whatever offer is in front of you and run the one-move blend: teaser rate times its fraction of the year, plus base rate times the rest. If the blended number doesn’t clear the everyday rates on our savings board, the honeymoon is costing you money, however large the font. The Financial Consumer Agency of Canada’s investing basics cover the underlying products; the blend is just arithmetic laid on top. Then set a rate alert so the day a better everyday rate shows up, it comes to you, and no bank’s marketing calendar gets a vote.
Frequently asked questions
What is a HISA Promo rate?
It’s a temporary bonus rate on a high-interest savings account, usually for new clients or new deposits, that reverts to a much lower base rate after a set period. On our boards, Promo rates are labelled separately from everyday rates so the two are never averaged together or confused.
What happens to my savings account interest after the promo ends?
The account drops to its base rate automatically, with no action required from you, which is rather the point. From that day forward you earn the base rate on the full balance. The blend of the two periods, rather than the headline, is what your year actually pays.
Are high-interest savings accounts safe?
Deposits at CDIC member institutions are insured up to $100,000 per depositor, per insured category, and credit union deposits carry provincial coverage instead. A Promo expiring changes what you earn, never what you deposited. Our deposit insurance guide covers how the categories work.
Is it worth switching banks for a Promo rate?
Run the blended rate for the full year, including any dead days in transit and any fees on required paired accounts, then compare it to the best everyday rate you can hold without switching. If the switch would also move you between a bank and a credit union, banks vs credit unions covers what else changes. If the blend wins by enough to pay for the admin, it’s a real offer. If it doesn’t, the switch pays out mostly in adrenaline.
How is HISA interest calculated?
At most institutions, interest is calculated on each day’s closing balance and credited to the account monthly. That daily mechanic is why a Promo’s length matters so much: every day after the teaser expires is a day earning base, and the days are what the blend counts.
Rates referenced in this article were checked against Ratehunter's data on the publication date shown above and may have changed since — the rate boards always carry the current numbers. See our editorial standards andadvertiser disclosure.