High Interest Tax Free Savings Accounts (TFSA)
ING Direct now offers the highest interest Tax Free Saving Account (TFSA) in Canada at 3.0%. Not only is it free, they are offering a $25 bonus directly into your account when you use an “orange key” code - Note that the bonus requires a minimum deposit of $100 with the initial registration cheque.
As I mentioned in my upcoming TFSA article before the new year, most big banks and smaller online banks are offering high interest tax free savings accounts. Now that the TFSA is here, below is a list of banks that are offering it as a high interest account. This is the perfect solution for using the TFSA as an emergency fund.
Here are the offerings along with the current interest rate. For those of you looking for a refresher course, here’s how the tax free savings account (TFSA) works.
- ING Direct (my ING Direct Review): 3.00% (Orange Key $25 bonus)
- Outlook Financial: 1.50%
- Canadian Tire: 1.50%
- Manulife: 1.05%
- HSBC: 1.05%
- BMO: 1.00%
- Citizens Bank: 1.00%
- TD Bank: 1.00%
- PC Financial: 0.75% + bonus
- CIBC: 0.75%
- RBC: 0.75%
- Achieva Financial: ?%
- Scotia Bank: ??
From the list, it seems that most of the major players have created a tax free savings account. That is except Scotia Bank. Perhaps their TFSA products are in branch only?
As the name of the account states, it’s a tax free account. This means that all the interest in the account can accumulate tax free. Not only that, you can withdraw from the account at any time without any penalties. In addition to being a simple savings account, the TSFA can be a trading account or even a viable alternative to the RRSP Home Buyers Plan.
Have you opened your TFSA yet? If so, who did you open it with?