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The best tax free saving accounts (TFSAs) in Canada

TFSA savings accounts are a great option to grow your savings.

Compare TFSA saving accounts

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  1. Featured

    3.35%$168 first year return based on$5,000 balance
    Monthly fee
    $0.00
    Transaction fees
    $3.00
    E-transfer
    $0.00
  2. Featured

    2.50%$125 first year return based on$5,000 balance
    Monthly fee
    $0.00
    Transaction fees
    $0.00
    E-transfer
    $0.00
  3. Featured

    2.00%$100 first year return based on$5,000 balance
    Monthly fee
    $0.00
    Transaction fees
    $0.00
    E-transfer
    $0.00
  4. CIBC Tax Advantage Savings Account

    3.00%0.75% after $38 first year return based on$5,000 balance
    Monthly fee
    $0.00
    Transaction fees
    $0.00
    E-transfer
    $1.50
  5. Scotiabank Savings Accelerator Account (TFSA)

    0.75%$38 first year return based on$5,000 balance
    Monthly fee
    $0.00
    Transaction fees
    $5.00
    E-transfer
    $0.00
  6. Bank of Montreal BMO TFSA Saving Account

    0.05%$3 first year return based on$5,000 balance
    Monthly fee
    $0.00
    Transaction fees
    $0.00
    E-transfer
    $0.00

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The best overall savings accounts in Canada

What is a tax free savings account (TFSA)?

A Tax-Free Savings Account (TFSA) is a tax-shelter for your investments. Despite what the name implies, a TFSA is more than just a simple savings account—you can hold a wide range of investments and securities inside a TFSA, including cash, stocks, bonds, mutual funds, and guaranteed investment certificates (GICs). The reason it’s called a Tax-Free Savings Account is because all the earnings generated by the investments in your TFSA aren’t taxed, that is, your savings are allowed to grow tax-free.

 

How does a TFSA work?

Every year, a certain amount of contribution room is made available to you. This is known as the annual contribution limit. You start accumulating contribution room from the year you turn 18, even if you haven’t opened a TFSA by that time. If you don’t contribute the maximum amount that you’re allowed in a given year, your unused contribution room is carried forward to future years.

You can withdraw money from your TFSA at any time completely tax-free (you don’t have to report withdrawals as income when you file your taxes). What’s more, you can recontribute whatever funds you’ve withdrawn back into your TFSA starting from the next calendar year.

Example: TFSA Contribution Room
$5,500 TFSA Contribution Limit for 2017 + $2,000 Unused Contribution Room from 2016 + $1,000 Withdrawls made from your TFSA during 2016 = $8,500 TFSA Contribution Room.

Find out how much you can contribute to your TFSA by using our contribution limit calculator.

TFSA FAQ

Anyone seeking to open a TFSA must be a Canadian resident, have a Social Insurance Number (SIN), and be at least 18 years old.

What is a TFSA?


How do TFSA contribution limits work?


TFSAs vs. RRSPs: Which one is right for you?


Want to maximize your TFSA by investing in stocks and ETFs? Consider:

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Other popular types of savings accounts

TFSAs savings account are a great option to grow your everyday savings - but not the only ones available to Canadians.

High-Interest Savings Accounts (HISAs)

Most high-Interest Savings Accounts (HISAs) offer interest over 1.00%. Unlike the TFSA, income tax is charged on interest earned, as it is a non-registered account. They do offer high-interest, however, and are excellent options to reach short-term savings goals.

Registered Retirement Savings Plan (RRSP)

A Registered Retirement Savings Plan (RRSP) is a savings plan which offers tax-benefits for retirement saving. Like a TFSA, it comes with a contribution limit.

Youth Savings Accounts

Some banks and credit unions offer exclusive savings accounts just for kids, allowing them to save their own money and learn how banking works. Interest is usually lower, and accessibility is typically limited.

Senior Savings Accounts

Canadians 65 and over can take advantage of seniors savings accounts that have lower transaction fees and other perks just for seniors.

Natasha Macmillan, Business Director of Everyday Banking

With over a decade of experience in the finance industry, Natasha works closely with Canada's top financial institutions - from banks to credit unions - to help Ratehub.ca's 1,200,000 monthly users get matched with the right banking products. read more

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