Your home sold—now what?

Several options are available—but what is best for your situation? Short-term investments such as bonds and guaranteed investment certificates (GICs) pay interest but might not give you the flexibility you need. Stocks and exchange-traded funds (ETFs) offer potentially higher yields but also come with higher risk. A simpler and more accessible solution is to use a high-interest savings account (HISA), like Simplii Financial’s HISA.

Simplii is a Canadian digital bank with over two million customers. It offers 24/7 access to online and mobile banking with no monthly fees, as well as access to one of the largest national ATM networks through CIBC. With Simplii’s HISA, you can earn high interest, and you don’t have to lock in your money for a set period of time, as you would with a bond or GIC. Plus, you already know how to use it—Simplii’s HISA works just like a regular bank account.

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Simplii Financial High Interest Savings Account

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Simplii’s HISA has no transaction fees or monthly fees, and no required minimum balance.

Welcome offer: Earn 6.00% interest on eligible deposits for five months. (Limits apply. Offer ends Jan. 31, 2025.)
Interest rate: 0.35% to 3.75% (depending on your balance)

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Are you planning to sell your home? 

The real estate market has been slow, despite recent reductions in the Bank of Canada benchmark interest rate and new buyer-friendly changes to mortgage rules. But economists widely expect more cuts from the central bank before the end of the year. Considering all these factors, we may see a stronger real estate market in the months ahead, enticing more buyers and sellers to jump back in.

If you’ve been thinking about selling your property, now’s a good time to get ready, and to make a plan for what to do with the money while you look for your next property or make other plans. Let’s look at what happens immediately after you sell your home.

How do home sellers get paid?

Depending on the closing date, the proceeds from the sale of your home may take a while to reach your bank account. Your lawyer will take on the tasks required to close your home sale, including discharging the mortgage and title, reviewing property tax information, performing closing adjustments and preparing documentation. However, when it comes to receiving money from the buyer, it will go through several hands before it gets to your bank.

Your lawyer will first discharge (repay) your mortgage, if you have one, and cover any other charges, such as a prepayment penalty or other fees. Next, your lawyer will deduct their legal fees. Then, the realtors on both the buy and sell sides receive their commissions, and what’s left is yours.

Your lawyer will give you a full accounting of how they distributed the monies and what your net proceeds are. You will receive a certified cheque, bank draft or wire transfer for the proceeds on or after closing day. Check with your lawyer for the exact timing.

If you aren’t immediately closing on a new home, you can put the money into a high-interest savings account, where it will grow while you think about your next steps.

What are high-interest savings accounts?

High-interest savings accounts provide higher interest rates than traditional savings accounts. Unlike with GICs, HISAs allow you to access your funds anytime and still earn a great rate. Look for a HISA that has low or no fees. Simplii Financial’s HISA has no monthly fees or transaction fees, and there’s no minimum balance required. The larger your account balance, the more interest you could earn.

For a limited time, Simplii’s HISA has a generous welcome offer: 6.00% interest on eligible deposits for five months. (Offer ends Jan. 31, 2025.) Visit Simplii Financial’s website for current rates.

The HISA advantage

If you’re selling your property and are figuring out what to do with the proceeds while you search for your next home, a HISA is a great option to store your cash. Parking the proceeds in a Simplii HISA can help you earn significant interest while keeping your funds safe and accessible—giving you the flexibility to withdraw your cash when the right opportunity appears.

More on savings:

• The one inflation tool you need for your finances
• Does buying GICs still make sense after the recent rate cuts?
• How much is my $100 Canada Savings Bond worth now?
• How to plan for retirement when you have no pension

About Jessica Morgan

Jessica Morgan is a personal finance writer, speaker and the founder of Canadianbudget.ca. With an MBA from Toronto Metropolitan University, she focuses on financial literacy for women and public sector employees.

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