Prime 11 Money & Cash Market ETFs in Canada For 2025

Because of all the tariff speak, there was a variety of curiosity in Canada’s Greatest Money ETFs and different low danger investments these days. You may additionally know these alternate traded funds as HISA ETFs (excessive curiosity financial savings account ETFs).

Money ETFs aren’t precisely the identical factor as cash market ETFs – however on the subject of most individuals’s portfolios, the explanations for getting them are very related. They’re each examples of fastened revenue (versus shares/equities) and are much less unstable than many different sorts of investments. 

One other apples-to-apples comparability for money ETFs, could be GICs. Try our article on the perfect GIC charges in Canada for extra data.

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Comparability Chart: Greatest Money ETFs in Canada for 2025

Are Excessive Curiosity Financial savings Accounts ETFs the Similar Factor as Canadian Money ETFs?

With all the current… curiosity… in greater rates of interest, some folks have gotten confused as to what precise funding merchandise are in these ETFs.

An important factor to know is that every one of those “Money ETFs” that we recognized above are thought-about very low danger, fastened revenue investments. They’ve barely alternative ways of investing your cash, however they’ve far more in widespread than not.  

A Money ETF is the very same factor as a excessive curiosity financial savings account ETF (additionally known as HISA ETFs).  

I’ve to confess that I wasn’t actually conversant in these merchandise till a number of years in the past when rates of interest shot up.

Consequently, when you’re like me, you didn’t actually perceive how an ETF that mainly invested your cash in a excessive curiosity financial savings account for you, really acquired a better price of return than you possibly can get.

For instance, the perfect excessive curiosity financial savings accounts in Canada proper now can get you about 3% curiosity.  Certain, if we test Canada’s Greatest GIC Charges, we see that we are able to get 3.50% there, however that’s for a product that’s basically locked in for a full 12 months. Money ETFs are like excessive curiosity financial savings accounts in that they’re totally liquid and could be transformed to money simply at any time.

So then how on the earth is the Horizons Money Maximizer ETF a greater yield than the excessive curiosity accounts that you’ve got entry to?!

Lengthy story quick, by taking your cash, and mixing it with that of 1000’s of different Canadians, these fund corporations can method huge banks and mainly say, “Look, give us your finest price on primary deposits.” As a result of they’re coping with such massive quantities of cash, they’ll negotiate a price that could be very near the market price for 1 12 months GICs, regardless of preserving the cash totally liquid.

I’ve included some ETFs within the above listing which can be technically known as cash market ETFs, and we’ll study what which means later on this article, however for now, simply know that the highest Money ETFs on this listing will take your funding cash and put it into particular excessive curiosity financial savings accounts at Canada’s greatest banks.  That implies that the phrases “Money ETF” and “HISA ETF” imply precisely the identical factor more often than not.

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What Is the Greatest Money ETF in Canada For Parking Money?

For my cash, the Horizons Money Maximizer ETF (HSAV) is the perfect money ETF in Canada in the intervening time. It has a really affordable MER, and at present has the perfect yield out there.  

On prime of these benefits although, HSAV has one specific characteristic that places it head and shoulders above the opposite ETFs:

It takes your curiosity funding returns, and transforms them into capital features!

In a lot the identical approach as Horizons has performed with whole returns ETFs for equities, they’ve structured the HSAV ETF to make it possible for it doesn’t distribute the curiosity cash every month.  As a substitute, it’s mechanically reinvested.  

When you’re investing in a money ETF exterior of your RRSP and TFSA, then HSAV has an enormous benefit, as you’ll be taxed on the advantageous capital achieve price everytime you select to promote the ETF, versus being mechanically taxed on the greater price that curiosity revenue is taxed at every month.  It additionally makes it an ideal match for Canadian expats – or to carry inside a company account.

Simply so that you just totally perceive how HSAV works although – it’s essential to notice that there aren’t any new shares of HSAV being created, so it’s potential (though fairly unlikely) that the ETF can commerce at a slight low cost or surplus to the worth of the underlying high-interest accounts.

Are Money ETFs Secure?

Money ETFs are secure!

Full Rationalization: Money ETFs are as secure because the banks which can be holding the cash.

As a result of all of our greatest Canadian Money ETFs use Schedule 1 Canadian banks (aka: the large banks in Canada) to carry their cash, then so long as the financial institution doesn’t go bankrupt, your cash is 100% secure. Canadian banks are a number of the most secure on the earth, and I can’t see the federal government letting them go bankrupt, so for me, that’s loads secure sufficient.

Now, it must be mentioned that the one place we would say that Canada’s excessive curiosity financial savings accounts could be thought-about very barely extra secure than Money ETFs, is on the subject of CDIC insurance coverage. You may learn extra concerning the Canadian Deposit Insurance coverage Company, however the primary thought is that the Canadian authorities will assure deposits as much as $100,000. 

You gained’t have that assure with a Money ETF – however once more – you might have the consolation of figuring out that your deposit is at a significant Canadian financial institution.

It must also be famous that after we are speaking about Money ETFs being secure, we’re referring to fraud or chapter.  From an funding returns perspective, the yield of Money ETFs will go up or down with regardless of the banks are keen to supply for deposits. That variety of course shall be straight tied to the Financial institution of Canada’s key rate of interest.  

While you search for Money ETFs or HISA ETFs, you’ll seemingly see them in both $50 or $100 denominations.  Some people get scared as a result of they see the “value” of the ETF models going up and down – however don’t be alarmed. All that’s taking place is the ETF is build up money all through the month, after which on the finish of the cash they’ll ship the cash out to unit holders and the value will return to $50 or $100. That’s often the perfect time to purchase a Money ETF.

Why Use Money ETFs (Professionals and Cons)

For me, the case for utilizing Money ETFs boils down to 3 most important issues:

1) A wonderful rate of interest. Greater than what you get in a excessive curiosity financial savings account.

2) The cash in a Money ETF is at all times liquid – not like the cash in a GIC.

3) It’s simply approach simpler to make use of the cash already in my brokerage account.

I wish to attempt to preserve monetary stuff so simple as potential. Once I ship cash to my brokerage account, I don’t wish to request to get it again once more, after which arrange a excessive curiosity financial savings account, and have to fret concerning the stability there too.

As a substitute, an individual can simply use a Money ETF (in my case, it’s HSAV) to rapidly spend money on a really liquid type of fastened revenue that may be transformed to Canadian {Dollars} at any time.  A good way to get some return on cash saved for a brand new automobile, downpayment, or journey.

Some would possibly level to the shortage of CDIC insurance coverage as a draw back, however as I wrote above, I believe the probabilities of a significant Canadian financial institution going underneath are most likely about the identical as a worldwide nuclear warfare.  

The comparatively small Administration Expense Ratios (MERs) do eat into your earnings yield to some extent, however contemplating how far more yield the ETF corporations are in a position to negotiate versus your common excessive curiosity financial savings account choices – you’re approach forward of the sport.

I might argue the one true draw back to utilizing a Money ETF is the chance value of not having your cash in one other funding.  Whereas the present 5.5% yield on my favorite Money ETF is a extremely strong assured return, it’s nonetheless not even near the 9-10% that the inventory market has averaged in Canada and the USA over the past 100 years.

Are Cash Market ETFs the Similar Factor as Money ETFs?

When you seek for Money ETFs and excessive curiosity financial savings account ETFs you’re additionally prone to come throughout the phrase cash market ETFs.

As I mentioned within the introduction, Money ETFs and HISA ETFs are the very same factor.

Cash market ETFs are similar to Money ETFs, however they aren’t equivalent.

Each cash market ETFs and Money ETFs could be thought-about fastened revenue investments, and each are straight tied to rate of interest strikes.  

The distinction is that cash market ETFs typically include very quick time period authorities and company debt (say 1-3 months in length), whereas Money ETFs and HISA ETFs are literal liquid money held in excessive curiosity accounts.

Purchase Money ETFs in Canada

A number of of Canada’s largest huge financial institution brokerages don’t permit you to buy these Money ETFs.  

That mentioned, each of our main on-line brokerages do provide user-friendly entry to Canada’s Money ETFs.  You may try our Qtrade Evaluation and Questrade Evaluation for extra data.

Shopping for a Money ETF isn’t any completely different than buying a inventory or another ETF.  You merely determine how a lot cash you wish to make investments, divide that quantity by what the ETF prices per unit (often about $50), after which kind within the variety of models you want to buy.

Money ETFs and HISA ETFs vs GICs

Within the battle for the perfect low danger investments in Canada, it’s actually value evaluating our greatest GIC charges to money ETFs.

The argument between Money ETFs and GICs mainly comes all the way down to how a lot you worth the additional liquidity of a Money ETF vs the marginally extra secure (once more, each are very very very secure investments) nature of a GIC, plus the marginally greater rates of interest {that a} GIC gives.

Personally, if you have already got the cash in a brokerage account, then I believe the sheer comfort of a Money ETF makes a variety of sense. That mentioned, you possibly can try our EQ Financial institution Evaluation if you wish to see all of the cool methods opening an account with Canada’s finest GIC financial institution may also help you. At the moment their charges prime out at 5.75%.

GICs are additionally a fantastic thought when you suppose rates of interest would possibly go down rapidly. Money ETFs will instantly mirror rate of interest cuts, whereas GIC charges are locked in for the interval you bought them for (often one to 5 years).  In fact, when you can predict rate of interest actions, you then’re a better particular person than me!

Continuously Requested Questions About Money ETFs

Are Canada’s Money ETFs Value It?

Money ETFs could be one of the underrated instruments in a Canadian investor’s toolbox proper now.

They provide the protection and predictability of a high-interest financial savings account, whereas delivering returns that come surprisingly near what you’d get with a GIC. The added bonus is you could maintain them proper inside your brokerage account, which makes rebalancing and managing your portfolio that a lot simpler.

Provided that we’re getting into waters which can be basically unprecedented (commerce wars, actual wars, and so forth) ignoring the money aspect of your portfolio can value you. Leaving cash in a conventional huge financial institution financial savings account is mainly setting hearth to your short-term returns. The unfold between what your financial institution pays you and what you possibly can be incomes via a Money ETF is substantial!

Now, I’m not the sort to overload on fastened revenue, however on the subject of parking money for short-term objectives or preserving the “secure” a part of your portfolio working for you, Money ETFs (aka HISA ETFs) make a ton of sense. They’re easy, they’re handy, they usually’re liquid.

Canada’s money ETFs are good for the correct use case, as they’re a sensible method to squeeze a bit extra worth out of your portfolio with out taking over additional danger.