BMO savings account interest rates change with the market

BMO does not publish a single fixed interest rate for all savings accounts. The rate you earn depends on the account type you hold, the balance you maintain, and current market conditions. BMO adjusts rates periodically—sometimes monthly—based on what the Bank of Canada does with its policy rate.

As of now, BMO's savings account rates range from near zero on basic savings accounts to higher rates on promotional or high-interest savings products. The exact number you see when you log in or visit a branch will be different from what someone else sees, depending on which account product you own.

To find your current rate, log into your BMO online banking, call BMO customer service at 1-800-363-9992, or visit a branch. They can tell you the exact rate attached to your specific account today.

Key Takeaways

  • BMO's savings rates vary by account type—basic savings accounts earn less than high-interest savings accounts or promotional products.
  • Rates change regularly and are not fixed, so the rate you earn today may be different next month.
  • You can find your current rate by logging into online banking, calling customer service, or visiting a branch in person.
  • Higher balances sometimes may have access to for better rates on certain BMO products, so ask about tiered rate structures when you call.
  • BMO also offers registered accounts like TFSAs and RRSPs with their own interest rates, which may differ from regular savings accounts.

How BMO sets rates on different account types

BMO offers several savings products, and each one carries a different interest rate. A basic savings account—the kind many people use for everyday deposits—typically earns the lowest rate. A high-interest savings account (HISA) earns more. Registered accounts like a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) held at BMO may have their own rates.

Some BMO products are promotional. These accounts offer a higher rate for a limited time—often three to six months—to attract new customers. After the promotional period ends, the rate drops to the standard rate for that account type. BMO advertises these on their website and in branches, so check whether you are looking at a promotional rate or a permanent one.

The rate also depends on your balance. Some BMO accounts have tiered rates: if you hold $5,000 or more, you earn one rate; if you hold $25,000 or more, you earn a higher rate. Ask BMO directly whether your account type has tiers, because this information is not always obvious online.

When and why BMO changes its rates

BMO changes savings rates in response to the Bank of Canada's policy rate decisions. When the Bank of Canada raises rates, BMO typically raises savings rates within days or weeks. When the Bank of Canada cuts rates, BMO usually cuts savings rates as well, though sometimes with a delay.

BMO also adjusts rates based on competition. If other banks offer higher rates on savings accounts, BMO may raise its rates to keep customers. Conversely, if BMO sees deposits flowing in faster than expected, it may lower rates because it does not need to attract more money right now.

You will not receive a notice every time BMO changes your rate. The change happens automatically in your account. Check your rate every few months, especially after the Bank of Canada announces a rate decision, to see whether you are still earning competitively.

How to compare BMO rates to other banks

BMO's rates are not always the highest available. Other banks—including online-only banks like EQ Bank, Tangerine, and Wealthsimple—sometimes offer higher rates on savings accounts. To compare, visit each bank's website and note the rate they advertise for the account type you want.

Keep in mind that advertised rates are often promotional rates that apply only to new customers or for a limited time. Once the promotional period ends, the rate drops. Read the fine print to see how long the rate lasts and what the standard rate will be afterward.

If you find a higher rate elsewhere, you can move your money. Switching banks takes a few days, but it is straightforward: open an account at the new bank, provide your old account details, and the new bank can transfer your funds for you. You do not lose interest during the transfer—interest accrues up to the day you withdraw.

What happens to interest if you withdraw money early

BMO savings accounts are not term deposits, so you can withdraw money anytime without penalty. Interest accrues daily and is usually paid monthly or quarterly, depending on the account. When you withdraw, you keep all the interest you have earned up to that point.

If you withdraw before the interest is paid out, you still earn interest on the balance you held. For example, if you hold $10,000 for 20 days of a 30-day month, you earn interest on $10,000 for those 20 days. Interest is calculated daily but credited to your account on a set schedule—often the last day of the month or the last business day of the quarter.

Some promotional savings accounts have conditions. Read the terms carefully: a few BMO products require you to maintain a minimum balance or make no withdrawals during the promotional period to earn the advertised rate. If you break the condition, the rate may drop to the standard rate retroactively.

Tax implications of BMO savings account interest

Interest you earn on a regular savings account is taxable income. BMO will report the interest you earned in the previous year on a T5 slip, which you receive by the end of February. You must include this amount on your tax return.

If you hold a TFSA at BMO, interest earned inside the account is not taxable. You do not report TFSA interest on your tax return, and it does not reduce any tax credits or benefits you receive. This is one reason TFSAs are popular for savings.

If you hold an RRSP at BMO, interest earned inside the account is also not taxable in the year it is earned. However, when you withdraw money from an RRSP, that withdrawal is taxable income. Interest earned inside the RRSP is taxed only when you take the money out.

Frequently Asked Questions

How often does BMO pay interest on savings accounts?

BMO typically pays interest monthly or quarterly, depending on the account type. Log into your online banking or call customer service to confirm the payment schedule for your specific account. Interest is calculated daily, so you earn it every day, but it is credited to your account on the scheduled payment date.

Can I lock in a BMO savings rate for a year?

No. Savings accounts have variable rates that change with the market. If you want a fixed rate, BMO offers GICs (may provide Investment Certificates), which lock in a rate for a set term—usually one to five years. The tradeoff is that you cannot withdraw the money early without losing interest.

Does BMO pay higher interest if I set up automatic deposits?

Not automatically. However, some BMO promotional accounts require automatic deposits or regular contributions to earn the advertised rate. Check the terms of your specific account or ask BMO whether automatic deposits unlock a higher rate.

What is the minimum balance to earn interest at BMO?

Most BMO savings accounts earn interest on any balance, even $1. However, some accounts have minimum balance requirements to avoid monthly fees. Check your account terms or call BMO to confirm whether your account has a minimum balance requirement and what it is.

If I move my money to another bank, do I lose the interest I earned?

No. Interest accrues up to the day you withdraw. You keep all interest earned, and BMO will report it on your T5 slip for tax purposes. The new bank's interest rate applies only to money you deposit after you open the account there.