Using a TFSA is a great way to avoid paying taxes. However, it can be a bit confusing for many Canadians, primarily due to the name. While you can put many different types of investments—like stocks and mutual funds—in a TFSA, it can also be used as a place to stash your cash. Your TFSA might be in need of a rebrand to be a bit easier to understand, but it still can be an amazing tool for you.
Even though tax-free savings accounts are already good, they keep getting better. The amount that you can hold in your TFSA continues to grow! In the beginning of 2018, you gained an additional $5,500 in TFSA contribution room, and you will receive another increase in your contribution room at the beginning of 2019.
If you’re looking for a TFSA savings account that’s similar to a high-interest savings account, we found a few that offer a good rate and provide great features (like free transfers). Here are the best TFSA savings accounts in Canada:
Alterna Bank TFSA eSavings Account
The Alterna Bank TFSA eSavings Account is similar to the Alterna Bank High Interest eSavings Account. It has an interest rate of 2.25% and offers both unlimited free withdrawals and debits. There’s also no minimum balance and no monthly fee.
Alterna is a subsidiary of Ottawa-based credit union Alterna Savings. You can live anywhere in Canada if you want to open an account.
Motive Financial Motive® TFSA Savings Account
The rate on the Motive Financial Motive® TFSA Savings Account isn’t as high as the one offered by Alterna but it still offers a great rate of 1.8%. There are also unlimited free withdrawals and transfers.
Tangerine Tax-Free Savings Account
The Tangerine Tax-Free Savings Account doesn’t have the best rate on the market (it’s 1.25% for current clients; new clients get 3% for the first 182 days and 1.25% thereafter) but it does come with an unlimited number of free transfers, which many of its competitors don’t offer. The account has no fees and there’s no minimum balance required.
Tangerine (formerly ING Direct) is one of the country’s first digital banks and owned by Scotiabank.
- The Best High-interest Savings Accounts in Canada
- 5 Reasons to Have a TFSA
- The Differences Between RRSPs and TFSAs
Flickr: KMR Photography