I have been chatting with a friend who asserts that all investments have an associated risk. In reference to this I suggested a High Interest Savings Account, claiming it has no risk. My friend asserts that this is quite different from "no risk."

So I want to ask where does the risk come from in reference to a HISA, or is there even any?

For context, I'm refering to HISA offered by Canadian banks such as CIBC.

  • That is a term that lots of people use for different things. If you are talking about a government insured savings account (FDIC in the US), that's different than a money market account that isn't FDIC insured or one of the various apps that offer "high interest savings accounts" that have various investment risks Commented Jun 23, 2022 at 22:06
  • @JustinCave In my case I was talking about a HISA via an Canadian Bank, such as CIBC. However, I'm okay with the question being answered by any of the options you suggested, hopefully the just state their appropriate assumption in their answer
    – akozi
    Commented Jun 23, 2022 at 22:11
  • I added the Canada tag; if you disagree, feel free to remove it again.
    – Aganju
    Commented Jun 24, 2022 at 0:36
  • @Aganju a fair tag thank you! It definately plays into my view of the risk
    – akozi
    Commented Jun 24, 2022 at 1:09

5 Answers 5


There is no fixed definition of "high interest savings account" so you'd need to view the disclosures.

If you are opening an account at a bank and that account is insured by the government (the FDIC or NCUA in the United States) then there is (effectively) no risk of losing your money assuming your account is under the deposit insurance limit (currently $250,000 per depositor per bank per ownership category).

Frequently, banks offer money market accounts that offer better returns but are not FDIC insured. These accounts invest in very safe short term corporate and government bonds so the risk of losing money is very, very low and hasn't happened in history. But it could happen in theory. During the sign-up process, there should be a screen that warns you that you are investing in a non-FDIC insured account but that tends to be a warning that people blow right past.

There are also lots of non-bank entities that offer things called "high interest savings accounts". Some of these partner with actual banks so that your funds are FDIC insured. Some are investment companies that are offering uninsured money market funds that are still incredibly safe. Still others are investing in reasonably safe assets but not completely safe so you could lose money.

  • 1
    Well, nothing is zero risk. It's POSSIBLE that FDIC will go broke or renege on its promises. A small chance, but possible. You might say that for that to happen the government would have to be on the brink of collapse and the entire economy falling into anarchy, in which case a lost deposit may be very low on your list of things to worry about, compared to scavenging food and fighting off the zombie attacks. But it's possible.
    – Jay
    Commented Jun 24, 2022 at 14:22
  • 2
    @Jay - Sure. But it's pretty conventional to treat that risk as effectively 0 (and I do use the qualifier effectively). Sure, the US government could choose to let the FDIC fail rather than simply printing more money but the US government always has the ability to make good on FDIC deposit guarantees. They may have to inflate the currency beyond all reason to do so. But they always have the ability to make good. Commented Jun 24, 2022 at 14:29
  • Sure. I brought it up as a technicality, not as a substantive point.
    – Jay
    Commented Jun 24, 2022 at 17:27
  • @Jay it would be a very poor policy decision to let the FDIC go insolvent. Doing so would effectively crash the US economy. Commented Jun 24, 2022 at 20:19
  • @AndrewRay I'm not saying I expect it to happen tomorrow. I'm just saying that it's possible. If the US economy was in deep trouble and banks were failing left and right and the FDIC exhausted its reserved, etc. I'd put it in the same category as "US government defaults on bonds".
    – Jay
    Commented Jun 25, 2022 at 3:24

What is missing from the other answers is the underlying risk - an insurance is only as good as the insurer, here the Canadian Government.
In other words, the risk of partial or total loss exists, in the case that Canada goes bankrupt. Most people would consider this a negligible small risk (me included), but that's up to you.

Also, a high inflation can eat away the value of the investments. If you invest 1000 CAD, and you get back 1100, that sounds nice, but if the 1100 will only be enough to fill your gas tank, it's not so nice. Again, that risk is probably very small, but not zero.

  • 3
    I'm not sure the second paragraph is relevant here, in the context of risk. Regardless of what you do with your money, including keeping it in cash, wouldn't inflation be the same?
    – TTT
    Commented Jun 24, 2022 at 17:06
  • There are other investments that do not have the inflation risk (TIPS, etc.). So I think it is a risk of this investment (and most others, sure)
    – Aganju
    Commented Jun 24, 2022 at 23:13
  • Well yeah, I guess my wording choice of "regardless" was a bit of an exaggeration, since you're right that inflation adjusted investments do exist. (I'm not sure what the Canadian equivalent of TIPS would be. RRB maybe?) But the fact that other investments exist with higher returns doesn't mean a lower returning investment has more "risk", as in "risk of losses" which I thought was the point of the question. It sounds like you're thinking along the lines of "the risk of gaining less than you could", and that's pretty much a separate discussion, I think. ;)
    – TTT
    Commented Jun 25, 2022 at 2:52

Typically, in finance, "risk" means "variance of returns" - so an investment with high "risk" can gain or lose significant amounts of value in a time period. There are other types of "risk" including default risk (the risk that the investment won't pay our what it is supposed to), counterparty risk (the risk that the other side of the investment won't pay out), etc.

For a bank account, there is no risk in terms of return variance - you will get whatever interest you are entitled to based on the terms of the account. There might be counterparty risk if the bank is not insured by some agency, but no risk in the investment sense.

That said, high-interest accounts typically have other requirements like balance minimums that make up for some of the "cost" to the bank of paying more interest, but these are not "risks" per se (other than maybe liquidity risks if you can't use all of the funds when you need to).


I believe your friend is just being pedantic. (You could ask to be sure what they had in mind.) Regular savings accounts in Canada (both high and low interest) are CDIC insured. The probability of the Canadian economy collapsing such that CDIC insurance is unable to pay, is so low that, compared to other places you can put your money, effectively there is no risk.

When you talk about risk in general, it makes sense to consider the alternatives. Based on a previous question of yours, I assume your money is currently sitting in a very low interest bank account, also which is CDIC insured. Moving that money into another CDIC insured HISA literally has zero additional risk compared to leaving it where it is now. If one is extremely paranoid about the economy, then perhaps one might think the alternative is keeping it as cash somewhere. Statistically, the risk of cash being lost, stolen, or destroyed is much higher than CDIC failing. Another alternative is crypto, but without a locked in monetary standard it's far too volatile, and likely carries an even higher risk of being lost or stolen, than cash does.

By the way, an interesting statistic regarding CDIC:

Since our creation by Parliament in 1967, CDIC has handled 43 failures, affecting more than 2 million depositors. No one has lost a single dollar that is under CDIC protection.


If it's a true savings account, then it won't have any more risk than any other savings accounts. Not zero, but very low if your country has well-regulated banks.

The higher interest accounts usually have strings attached. For example, you have to give 90 days notice of withdrawals, or you can only open one if you have another account with the same bank.

  • Is it fair to say then that if my only other option is to have a regular savings account with a bank then moving that money to a HISA does not come with any risk of its own?
    – akozi
    Commented Jun 23, 2022 at 22:19
  • 2
    @akozi Yes. But make sure you qualify for the account, and the attached strings are acceptable to you.
    – Simon B
    Commented Jun 23, 2022 at 22:24

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