The Best TFSA Savings Accounts in Canada for 2019

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by Ratehub.ca April 16, 2019 / No Comments

*All rates current as of April 24, 2019.

A Tax-Free Savings Account (TFSA) is a type of savings tool designed to shelter your savings from taxes. While the name implies that a TFSA is a savings account, a TFSA is actually an account that allows you to pay no taxes on the interest that your savings have accrued. 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. 

Another reason why a TFSA isn’t precisely a savings account is that there is a contribution limit on the amount you can save. However, each year, Canadians are granted an extension on their yearly contribution limit. This limit is known as a TFSA Contribution Limit.

Contributions in your TFSA can grow and make a significant impact on your savings, especially if you select a competitive interest rate. The benefits 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 and a GIC TFSA, for example.

Below, you’ll find the best rates on tax-free savings accounts in Canada offered by financial institutions and credit unions. 


The Best TFSA Interest Rates in Canada for 2019

 

 

 

Best TFSAs in Canada 2019 (View All)

 

TFSA Provider TFSA Interest Rates Location
Meridian 3.25% All of Canada, ex. Quebec.
Steinbach Credit Union TFSA Account 2.85% All of Canada, ex. Quebec
Luminus Financial 2.85% Ontario only.
Motusbank 2.50% All of Canada, ex. Quebec.
Motive Financial Motive TFSA Savings Account 2.40% Ontario only.
Implicity Financial 2.40% All of Canada.
Alterna Bank TFSA eSavings Account 2.35% All of Canada.
DUCA Credit Union Earn More TFSA 1.60% Ontario only.
Parama Credit Union 1.50% Ontario only.
Tangerine TFSA 1.25% All of Canada
Simplii Financial TFSA 1.20% All of Canada, excluding Quebec.
Scotiabank TFSA 1.05% All of Canada
CIBC Tax Advantage Savings Account 0.85% All of Canada.
BMO TFSA 0.75% All of Canada.

 

 


Motusbank TFSA Savings Account

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

Motusbank TFSA Savings Account offers a competitive TFSA interest rate of 2.50%. Motusbank customers can enjoy no monthly costs or limits on deposits. There is also no minimum deposit requirement, meaning customers can open an account today. Additionally, Motusbank is part of The Exchange Network, meaning customers can access near 3300 ATMs across Canada.

Motisbank is open to all Canadian residents, excluding citizens living in Quebec.

  • 2.50% TFSA interest rate.
  • No fees or minimum deposit required.
  • The Exchange Network alliance.

Implicity Financial TFSA

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

Implicity Financial TFSA currently offers one of the best TFSA interest rates in Canada at 2.40%. The credit union also provides unlimited deposits and one withdrawal per month. An Implicity TFSA comes with no monthly fees and one free monthly withdrawal. Additional withdrawals cost $1. Interest on deposits is paid annually at maturity.

A division of Entegra Credit Union, Implicity Financial has an established history in Canada and has earned the trust of 15,500 Canadians with a reputation extending over 50 years.

  • 2.40% TFSA interest rate.
  • No monthly fee, administration fee, or transfer fees.
  • No minimum deposit required.

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 is similar to the Alterna Bank High-Interest eSavings Account. It has an interest rate of 2.35% and offers unlimited free withdrawals and debit transactions. There is no minimum balance required or no monthly fees charged. 

Alterna Bank is a subsidiary of Ottawa-based credit union Alterna Savings. Though Alterna Bank is an Ontario-based credit union, anyone living in Canada can open an account with Alterna Bank and get access to some of the best TFSA interest rates in Canada that are currently available.

  • 2.35% TFSA interest rate.
  • No fees.
  • No minimum balance required.

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 registered and non-registered investments as well. Luminus Financial currently offers a promotional rate on TFSAs at 2.85% for customers living in Ontario. 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 their ATMs. E-transfers are $1.00 per transaction.

  • New customer promotional TFSA rate of 2.85%
  • Regular TFSA rate of 1.75%
  • Free transactions, transfers, and ATM access.

Scotiabank Savings Accelerator Account TFSA

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

Scotiabank is one of the most well-known banks in Canada. It currently offers a 1.05% interest rate on its Scotiabank Savings Accelerator Account TFSAand additionally 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. 

  • 1.05% TFSA interest rate
  • No minimum deposit required.
  • Scotiabank online banking app available.

Want to compare all of the best TFSA accounts in Canada? Compare Best TFSA Savings Accounts

 


Steinbach Credit Union TFSA Account

  • TFSA Interest Rate: 2.85%
  • Unlimited external ATM Transactions

A Steinbach Credit Union TFSA Account offers a return rate of 2.85%. The credit union is provincially insured, as opposed to CDIC that comes with banking with traditional banks. Steinback Credit Union offers free ATM transactions.

Steinbach Credit Union TFSA are not available to residents of Quebec.


Motive Financial Motive® TFSA Savings Account

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

The rate on the Motive Financial TFSA Savings Account has become quite competitive. It currently offers one of the best TFSA rates on the market, at 2.40%. Investing your TFSAs with Motive Financial Motive TFSA Savings Account allows you to deposit any amount of funds at any time. 

Motive also honours unlimited free withdrawals and transfers. Motive also offers a TFSA GIC, which comes with tax benefits on your interest earned on GICs placed in a TFSA. Their returns are guaranteed and offer a variety of GIC terms.

Motive Financial’s Motive TFSA Savings Account is available exclusively to Ontario residents.


DUCA TFSA Savings Account

  • TFSA Interest Rate: 1.60%
  • Free transactions, ATM withdrawals, E-transfers, and external ATM use.

DUCA Credit Union TFSA offers a competitive interest rate at 1.60%. Interest on TFSAs in DUCA Credit Union accounts accrues interest daily paid daily out every month. DUCA offers its customers free e-transfers, withdrawals, and use of its external ATMs.

DUCA TFSA Savings Accounts are available exclusively to residents of Ontario.


Parama Credit Union TFSA Daily Interest Savings

  • Up to 1.50% interest rate.
  • Year-based fixed rate options available.
  • Mobile banking app.

The Parama Credit Union TFSA offers a competitive interest rate on TFSA deposits. Interest rates on TFSA deposits start at a yearly rate of 1.50%. Parama also offers fixed rates on TFSAs. Rates start at 2.50% for a one-year fixed term, 2.70% for a two-year fixed term, 2.80% for a three-year fixed term, 2.95% for a four-year fixed time, and 3.10% for a 5-year fixed term on TFSA investments. 

Parama has two branches located in Toronto, Ontario but Parama customers can use their reliable digital banking platform and their mobile app from the comfort of their own home. Parama Credit Union is exclusively available to residents of Ontario, Canada.


CIBC TFSA Tax Advantage Savings Account

  • TFSA Interest Rate: 0.85%
  • $25 minimum TFSA deposit.

The CIBC TFSA Tax Advantage Savings Account currently offers a promotional rate of 3.00% on new TFSA deposits. It is important to note that this is a limited offer. Once the promotion ends, the TFSA interest rate will drop down to its regular rate of 1.15%. Interest rates on your savings are calculated at the end of each day and paid to you monthly. The CIBC TFSA Tax Advantage Savings Account requires a minimum investment of $25 to open an account. It allows tax-free withdrawals at your convenience. You can also set up automatic deposits.


Meridian Credit Union TFSA

  • TFSA Interest Rate: 3.25%
  • 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 1.40%. 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. Meridian is available to all Canadians, excluding citizens living in Quebec.


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 fee.

The Tangerine Tax-Free Savings Account offers a rate on the market (it’s 1.25% for current clients; new clients get 3% for the first 182 days and 1.25% after that). However, it comes 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 to open a Tangerine TFSA. Customers can move funds at their convenience at no cost and can use Tangerine’s Automatic Savings Program (ASP) to create a roadmap for your financial goals.

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


Simplii Financial TFSA

  • TFSA Interest Rate: 1.20%
  • No minimum deposit amount or monthly fee.

Simplii Financial TFSA offers 1.20% interest on contributions made by its customers. Interest on your funds are calculated daily. Rates are subject to change, depending on the bank itself. As a budget bank, Simplii stays true to its name. Contributions with Simplii 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 subsidiary of CIBC. Simplii Financial customers can use any CIBC ATM. However, any additional banking must be done online, through the Simplii Financial app, or via telephone.


Bank of Montreal BMO TFSA Savings Account

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

BMO 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 Toronto for over two hundred years.


Traditional Banking vs. e-Banking

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.

Digital Banking has become a leading option for banking among Canadian citizens. Since its also offered by traditional banks and credit unions, e-Banking is has become a popular option for customers of traditional banks. Since e-Banking is banking is done 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 offer generally 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 traditional banks.


TFSA Contribution Limit – 2009 to 2019

In 2009, the Canadian government 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 effective savings tools among Canadians. However, considering that interest accumulated without taxation, a contribution limit had to be set in place. Each year, Canadians receive an increase in the contributions that they make into their TFSA. In 2019, the contribution limit for Canadian TFSA is $6000.

At the beginning of 2019, Canadians received a $6,000 limit in TFSA contribution room. You’ll receive another increase in your contribution room at the beginning of 2020, and at the beginning of every year that follows after. 

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. Each year, the good contribution limit from the prior year added to your TFSA contribution limit.

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

 

Ready to get the best tax-free savings account rate in Canada? Find out how much your savings 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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