The Best TFSA Savings Accounts in Canada for 2019

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by Ratehub.ca July 4, 2019 / No Comments

Tax-Free Savings Accounts (TFSAs) are investing tools designed to shelter your savings from taxes. While its name implies that it is a savings account, TFSAs are accounts that keep your investments and the interest that they earn tax-exempt.

A TFSA can be used as a regular savings account. However, unlike a regular savings account, a TFSA comes with a yearly contribution limit. This limit is known as a TFSA Contribution Limit and automatically increases each year for every Canadian citizen.

Contributions in your TFSA can grow and make a significant impact on your savings, especially if you select a competitive interest rate. The benefits of a TFSA don’t stop there, either. You can also put different types of investments in a tax-free savings account, such as a Mutual Fund TFSA or a GIC TFSA. You can also place stocks, bonds, and other types of investments in tax-free savings accounts.

By comparing the best TFSA rates in Canada, you can maximize the amount of interest on your savings and reap the benefits of tax-free interest even further.

 

The Best Tax-Free Savings Accounts in Canada 2019 (View All)
TFSA Interest Rate
Steinbach Credit Union 2.85%
motusbank 2.50%
Motive Financial 2.40%
Implicity Financial 2.40%
Alterna Bank 2.35%
Tangerine 1.75%
Luminus Financial 1.75%
DUCA Credit Union 1.40%
Meridian Credit Union 1.30%
Simplii Financial 1.15%
TD Bank 1.05%
Scotiabank 1.00%
CIBC 0.85%
BMO 0.75%

 

 

1. Implicity Financial TFSA

  • TFSA Interest Rate: 2.40%
  • No monthly, administrative, or transfer fees.
  • No minimum deposit required.

An Implicity Financial TFSA currently offers one of the best TFSA interest rates in Canada at 2.40%. The credit union allows investors to make unlimited deposits with no monthly fees. Investments are covered by the Deposit Guarantee Corporation of Manitoba (DICM).

Implicity Financial is a digital financial institution and a division of Entegra Credit Union, which has an established history in Canada built with 15,500 Canadians and a reputation exceeding 50 years.

Implicity Financial products are available to all Canadian citizens.

2. Alterna Bank TFSA eSavings Account

  • TFSA Interest Rate: 2.35%
  • No monthly, administrative, or transfer fees.
  • No minimum balance.

The Alterna Bank TFSA eSavings Account has an interest rate of 2.35% and offers unlimited no-cost withdrawals and transactions. There is no required minimum balance or monthly fees.

Alterna Bank is the online-only subsidiary of Ottawa-based credit union Alterna Savings. Investments with Alterna Bank are CDIC insured.

Alterna Bank is available to all Canadian citizens.

Want to compare the best TFSA savings accounts in Canada? Compare TFSA Savings Accounts

3. Motive Financial Motive® TFSA Savings Account

  • TFSA Interest Rate: 2.40%
  • No monthly fees with unlimited transfers and withdrawals.
  • TFSA GIC options are available.

Motive Financial’s Motive® TFSA Savings Account has quite the competitive rate, currently offering one of the best TFSA rates on the market at 2.40%. 

Investing in a Motive® TFSA allows you the flexibility to deposit any amount of funds at any time, with no penalties, as unlimited withdrawals and transfers are honoured.

Motive Financial also offers TFSA GICs which come with tax benefits on interest earned with GIC investments. Investments are insured by CDIC insurance.

Motive Financial’s Motive TFSA Savings Account is not available to residents of Quebec.

4. Scotiabank Savings Accelerator Account TFSA

  • TFSA Interest Rate: 1.05%
  • No monthly account fee.
  • Interest paid monthly.

Scotiabank is one of Canada’s most well-known banks, and currently offers a TFSA rate of 1.05% on its Savings Accelerator Account TFSA.

The TFSA provides customers with unlimited fund transfers within Scotiabank accounts.

Scotiabank customers can also enjoy the luxury of accessing over 1,000 Scotiabank branches, with e-Banking options for all of your on-demand banking needs.

Scotiabank products are available to all Canadian citizens.

5. Steinbach Credit Union TFSA Account

  • TFSA Interest Rate: 2.85%
  • No monthly account fees.

A Steinbach Credit Union TFSA Account offers a return rate of 2.85%. It costs $3.00 per transaction to withdraw funds from a Steinbach TFSA. The Steinbach, Manitoba-based credit-union is provincially insured.

Steinbach Credit Union TFSAs are available to residents of Quebec.

6. Luminus Financial Investment Savings Account TFSA

  • TFSA Interest Rate: 2.85% for new customers, 1.75% after 180 days.
  • No charge on in-branch, mail, electronic, transfers, payroll deductions, or direct deposit.
  • Interest calculated daily and paid monthly.

A Luminus Financial Investment Savings Account TFSA is available for in registered and non-registered investments.

Luminus Financial currently offers a promotional rate on TFSAs at 2.85% for new accounts.

After 180 days, the interest rate on a Luminous TFSA returns to its regular rate of 1.75%. 

The Toronto-based credit union also offers free transactions, transfers, and access to ATMs in the EXCHANGE Network. E-transfers are $1.00 per transaction.

Luminus Financial is a Toronto-based credit union, and while open to all Canadians, may require an in-branch appearance to open one of their tax-free savings accounts.

7. DUCA TFSA Savings Account

  • TFSA Interest Rate: 1.40%
  • Free transactions, ATM withdrawals, e-transfers, and external ATM use.

DUCA Credit Union offers a competitive interest rate on their TFSA at 1.40%. Interest that a TFSA in DUCA Credit Union accounts accrues interest daily paid daily and monthly. DUCA offers its customers free e-transfers, withdrawals, and use of its external ATMs.

Investments made with DUCA Credit Union are DICO insured.

DUCA TFSAs are available to all Canadian citizens but may require an in-branch appearance upon opening an account.

8. Parama Credit Union TFSA Daily Interest Savings

  • TFSA Interest Rate: up to 1.50%
  • Year-based fixed rate options available.
  • Mobile banking app.

Parama Credit Union offers a competitive interest rate on TFSA deposits, starting with an interest rate of 1.50%.

Parama also offers fixed rates on registered investments, such as TFSA GICs.

Though Parama Credit Union has two branches located in Toronto, Ontario, Parama customers can use their reliable digital banking platform and their mobile app to monitor their investments or make changes to their accounts.

Additionally, Parama Credit Union is an affiliate of the EXCHANGE Network.

Parama Credit Union is available to all Canadian citizens but requires an in-branch appearance to open an account.

9. CIBC Tax Advantage Savings Account

  • TFSA Interest Rate: 0.85%
  • No monthly fee for CIBC TFSA.
  • $25 minimum TFSA deposit.

CIBC currently offers a rate of 0.85% on deposits placed into a CIBC Tax-Advantage Savings Account. CIBC’s TFSA comes with no monthly fees for the account itself and allow unlimited transfers between accounts.

As one of Canada’s largest banks, CIBC is available to all Canadian citizens.

10. Tangerine Tax-Free Savings Account

  • TFSA Interest Rate: 3.00% for the first 182 days on deposits by new clients, 1.25% on deposits for existing clients.
  • No minimum deposit requirement.
  • No monthly fees.

Tangerine’s Tax-Free Savings Account offers a promotional rate, and one of the best on the Canadian market.

Rates for a Tangerine TFSA is 1.25% for current clients. New clients get 3% for the first 182 days. 

The account comes with no monthly fees and unlimited transfers. No minimum balance or monthly contribution is required either.

Tangerine customers can take advantage of Tangerine’s Automatic Savings Program (ASP) and create a roadmap or financial strategy specific to their savings goals.

Formerly known as ING Direct, Tangerine is among the first digital-exclusive banks in Canada, and a subsidiary of Scotiabank.

Tangerine is available to all Canadian citizens.

11. Simplii Financial™ Tax-Free Savings Account

  • TFSA Interest Rate: 1.20%
  • No minimum deposit amount or monthly fees.
  • Unlimited transfers and withdrawals.

Simplii Financial™ offers interest on TFSA contribution at 1.20%. Interest on deposits is calculated daily.

Contributions in a Simplii Financial™ TFSA come with no minimum contribution requirement.

Putting your funds into a Simplii Financial™ TFSA also means there are no fixed terms or monthly fees on any of the funds you’ve deposited.

Simplii Financial™, formerly known as President’s Choice Financial, is now a the digital-bank subsidiary of CIBC. Simplii Financial™ customers can use any CIBC ATM. Simplii Financial™ also offers a mobile app, online banking, and telephone service options.

Simplii Financial is not available in Quebec.

12. Bank of Montreal BMO TFSA Savings Account

  • TFSA Interest Rate: 0.75%
  • $50 minimum contribution requirement.
  • No monthly account fee.

BMO’s TFSA Savings Account currently offers an interest rate of 0.75% on TFSA contributions.

Opening a BMO TFSA requires a minimum investment of $50. Rates are calculated per year and are subject to change without notice.

Bank of Montreal serves as one of Canada’s Big Five banks and has been in business in Canada for over two hundred years.

BMO is available to all Canadian citizens.

13. motusbank TFSA Savings Account

  • TFSA Interest Rate: 2.50%
  • No monthly, administrative, or transfer fees.
  • Partnered with The EXCHANGE Network ATM network.

motusbank is the digital subsidiary of Meridian Credit Union. A motusbank TFSA Savings Account offers a competitive TFSA interest rate of 2.50%. motusbank customers can enjoy no monthly costs or limits on the deposits that they contribute.

There is also no minimum deposit requirement, meaning customers can open an account today. Additionally, motusbank is a member of The EXCHANGE Network, meaning customers can access near 3,700 ABMs across Canada. Investments with motusbank are CDIC insured.

motusbank is available to residents of Quebec.

14. TD Tax-Free Savings Account

  • TFSA Interest Rate: 1.00%
  • Registered TFSA options are available.
  • Availability in all Canadian provinces.

TD Bank offers a Tax-Free Savings Account with an interest rate of 1.00% on savings deposited into their tax-free savings accounts. 

As one of Canada’s most prominent banks, TD offers TFSA options for mutual funds, GICs, and various investment options which Canadians can use to let their investments grow with no tax deductions. 

TD Bank TFSAs are available to all Canadians.

15. Meridian Credit Union TFSA

  • TFSA Interest Rate: 2.85% 
  • No minimum deposit amount or monthly fee.
  • No fixed terms.

Meridian Credit Union TFSA currently offers new customers an interest rate of 3.25% for new customers.

After 121 days, the rate returns to the regular figure of 2.85%. Interest on Meridian TFSAs is paid monthly and calculated daily.

Customers can also enjoy free transactions, internal transfers, and external ATM use. E-transfers cost $1.25 each. Deposits are insured by the Deposit Insurance Corporation of Ontario (DICO).

Meridian Credit Union proudly serves all Canadian citizens.


What are Tax-Free Savings Accounts? 

Tax-Free Savings Accounts (TFSAs) are tax-shelters for savings. They can be used to harvest savings and earn tax-exempt interest. TFSAs come with a yearly contribution limit that resets and increases at the beginning of each new year. Any Canadian citizen over the age of 18 can open tax-free savings accounts. 

TFSAs aren’t exclusive for cash savings. They can also hold GICs, stocks, mutual funds, bonds, and exchange-traded funds (ETFs). If the deposits within the account remain under the yearly contribution limit, the interest earned on said deposits is also tax-exempt.

TFSA also allow unlimited withdrawals and contributions. However, this exception only applies to cash deposits. There is no penalty or taxation on the amount of cash you contribute or withdrawal—as long as you remain beneath the yearly contribution limit. 

Why Should I Use a TFSA?

Unless your bank is charging you a monthly fee for their services, tax-free savings accounts are entirely free to open and use. Since they can earn interest at no tax or penalty, you can contribute your savings as you see fit, and withdraw them as well.

Tax-free savings accounts are versatile. They can be used to save up for an emergency fund, short-term financial goals, as well as long-term financial goals.

Traditional Banking vs. e-Banking for TFSAs

Traditional Banking is banking done physically in a branch at a bank or a credit union, whereas e-Banking or Digital Banking is banking done over the phone or online. Both options offer tax-free savings accounts to Canadians. 

Digital Banking has become a leading alternative for banking among Canadian citizens. Since traditional banks and credit unions also offer it, e-Banking has become a popular option for customers of conventional banks. Because e-Banking occurs entirely online, the customer makes decisions for themselves wherever they are.

Some banks, such as Simply Financial or Tangerine, do not possess physical locations, hence their title of digital banks. Digital banks generally offer cheap banking options without the frills that come with paid accounts. As a result, options while banking with digital banks tends to be limited, depending on your banking needs.

Traditional banking, on the other hand, charges customers for their accounts but offers many more options in comparison to conventional banks.

Though it may not always be the case, digital or online banks tend to offer better interest rates, considering they do not have the overhead of physical locations. Still, it’s always a great idea to compare your options when purchasing TFSAs.

TFSA Contribution Limit: 2009 to 2019

In 2009, the Government of Canada introduced the Tax-Free Savings Account as an initiative to encourage Canadians to save more money. The effort resulted in one of the most popular and useful savings tools among Canadians. However, considering that interest accumulated without taxation, a contribution limit was set in place.

At the beginning of 2019, Canadians received an additional $6,000 limit in contribution room for their tax-free savings accounts. Since the introduction of the account, the cumulative contribution is set at $63,000. Each year, your unused contribution limit is added to the next’s year’s TFSA contribution limit.

Canadians will receive another increase in their contribution room at the beginning of 2020—and at the beginning of every year that follows after.

Below is every contribution limit per year since the introduction of the TFSA.

Year Contribution Limit
2009 $5,000
2010 $5,000
2011 $5,000
2012 $5,000
2013 $5,500
2014 $5,500
2015 $10,000
2016 $5,500
2017 $5,500
2018 $5,500
2019 $6,000

If you’re looking for a TFSA savings account that’s similar to a high-interest savings account, we found a few that offer high rates, with consideration to additional beneficial features. 

Want a side-by-side comparison of the best tax-free savings accounts in Canada? Find out how much your investments can make for you with Ratehub.ca’s TFSA rate calculator.

Want to compare the best TFSA savings accounts in Canada? Compare TFSA Savings Accounts

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