HISA vs. Market Investment (Canada)

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Compare HISA vs. Market Investment in Canada. See how annual taxes impact HISA growth and how capital gains inclusion affects market returns.

Last update Dec 2024
  • Scenario 1: HISA Growth
  • Scenario 2: Market Investment Growth
  • Which One Is Higher (%)

This chart compares HISA growth, taxed yearly, to market investments, where taxes apply only on realized gains when liquidating. Note the slower HISA growth due to annual taxation and the potential long-term advantage of market investments.

# Years from Now
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The amount of money you plan to allocate.

A =

The annual interest rate offered by the High-Interest Savings Account (HISA). This is the rate provided by your HISA provider. Note that market investments, whether bonds or stocks, are governed by the "Market Investment Return" rate below.

B =

Your marginal income tax rate, which impacts the after-tax returns of your HISA interest. For Canada, the capital gains tax is adjusted from this rate.

C =
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

This scenario calculates the growth of your investment in a High-Interest Savings Account (HISA). Since interest earned is taxed annually at your marginal income tax rate, the effective growth rate is reduced compared to the stated interest rate. Over time, this annual taxation can significantly impact the compounding effect, resulting in slower overall growth compared to tax-deferred or tax-efficient investment options.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

D =

Calculations

(Expressions are evaluated at every year.)

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