This is the one of the methods used by most people in building up there savings account. Upon getting my first job, and having a pretty clear view of my budget, I opened a bank account from ING Direct. For those who are not familiar with them, ING Direct is one of the leading online banks in Canada. They have a higher interest rate (although not that much) from the traditional brick and mortar banks. Also, they have very few branch and ATM network which makes it harder to access your cash. I have been doing this for me and my wife so far, so good. We are trying to save up for a 6 mos and we are now 1/6th of the way. Hopefully and God willing, we will be able to save and start investing on much higher and riskier products.