Savings and prize-linked savings glossary
What this glossary covers
This glossary explains the savings and prize-linked savings terms you meet using Lodavo or reading about money in Canada, from TFSA, CDIC and Plaid to skill-testing question, HISA and provably fair. Each entry is one or two plain sentences, Canadian and current, so you can scan it fast or deep-link to a single term. It’s written to be the cleanest, most accurate definition on the web for each one.
A few of these terms anchor how Lodavo works, so it helps to fix them early. Lodavo is Canada’s first prize-linked savings app: connect your savings or chequing account through Plaid, keep saving, and the more you put away, the more free tickets you earn in the weekly draw. It isn’t a deposit account, and the entries below (read-only access, no purchase necessary, provably fair) spell out how that works in practice.
A handful of numbers below, like the TFSA limit, CDIC coverage and the Bank of Canada policy rate, change over time, so they’re dated and worth confirming at the source. If you’re comparing tools while you learn the vocabulary, the roundup of the best savings apps in Canada puts several of these terms in context. Terms are listed A to Z below.
- Bank of Canada policy rate
- The central bank's target for the overnight rate, which influences the interest rates banks charge and pay across the country. It was 2.50% as of November 2026, after an increase on October 28, 2026, per the Bank of Canada (opens in a new tab).
- CDIC
- The Canada Deposit Insurance Corporation (opens in a new tab), a federal Crown corporation that automatically insures eligible deposits at member banks up to $100,000 per insured category, per institution, if a member institution fails. Lodavo isn't a bank and holds no deposits.
- Compound interest
- Interest earned on both your original principal and the interest you have already earned, so savings grow faster the longer they sit. Lodavo itself pays no interest. Your money keeps earning whatever your own bank pays.
- Direct deposit
- Having pay, a refund or government benefits paid straight into your bank account electronically instead of by cheque. Some accounts pay a higher rate or waive fees when you set up direct deposit.
- Emergency fund
- Money set aside for unexpected costs like a job loss, a car repair or a medical bill. A common guideline is three to six months of essential expenses, though that's a rule of thumb, not a fixed requirement.
- HISA
- High-Interest Savings Account, a deposit account that pays more interest than a typical chequing account. Rates vary by provider and promotional rates are temporary, so check the current rate and its end date before opening one.
- Interac e-Transfer
- A widely used Canadian way to send money between bank accounts using an email address or phone number. It's one of the two ways Lodavo pays out prizes, alongside a direct bank transfer.
- No purchase necessary
- A free alternate method of entry, so you never have to buy anything to enter or win. Together with the skill-testing question, it's what keeps a Canadian prize draw on the contest side of the line. Lodavo's full terms are at the contest rules.
- Open banking
- A framework, called Consumer-Driven Banking in Canada, that lets you securely share your banking data with apps you choose without handing over your password. Canada's framework became law in March 2026 and is still being rolled out, so check its current status.
- Plaid
- The secure data network many Canadian apps use to connect a bank account, covering over 99% of deposit accounts in Canada. You log in through your bank, the app gets scoped access, and you never share your bank password with the app. Lodavo connects through Plaid (opens in a new tab), explained on the supported banks page.
- Prize-linked savings
- Saving your own money plus a free chance to win a prize, where your principal is never spent or put at risk to enter. Your balance stays yours. Lodavo is Canada's first prize-linked savings app.
- Provably fair
- A method that lets anyone independently verify a draw wasn't tampered with, using published cryptographic proof rather than asking you to take the operator's word for it. See how Lodavo's draws are provably fair.
- Read-only access
- Permission to view account information, such as a savings balance, but not to move, withdraw, transfer or charge money. This is how Lodavo connects to your bank, so it can count what you save without ever touching it.
- Round-up saving
- Automatically rounding each card purchase up to the next dollar and setting aside the spare change. It's a low-effort way to build savings a few cents at a time.
- Skill-testing question
- A simple math question a winner must answer correctly to claim a prize. Canadian sponsors have asked one for decades. It comes from their lawyers rather than from any statute.
- TFSA
- Tax-Free Savings Account, a registered Canadian account where investment growth and withdrawals are tax-free. The annual contribution limit is $7,000 for 2026 (unused room carries forward), per the Canada Revenue Agency (opens in a new tab).
Frequently asked questions
What's the difference between a TFSA and a HISA?
Is prize-linked savings the same as gambling?
Canada’s first prize-linked savings app
The more you save, the more chances you get to win
Lodavo is free. Keep saving in the account you already use, and earn free tickets in every weekly draw.
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