A Tax-Free Savings Account (TFSA) is a powerful investment vehicle. It allows Canadians to save and invest money without paying tax on any investment income or capital gains earned within the account. With a TFSA, you can hold various investments, including cash, guaranteed investment certificates (GICs), stocks, bonds, exchange-traded funds (ETFs), and mutual funds.
While investing in stocks, ETFs, and mutual funds can yield higher returns, these investments come with market risk and no guaranteed returns. Those seeking safer investments can use their TFSA to invest in GICs or a savings account.
Best Types Of TFSA Accounts In Canada
Before exploring the best TFSA accounts in Canada, let’s briefly discuss how to invest or save using a TFSA. Your investments will have the same tax benefits regardless of the type of TFSA.
TFSA GICs
Guaranteed Investment Certificates (GICs) are low-risk investments that provide a guaranteed rate of return over a fixed term, typically one to five years. GICs within a TFSA offer tax-free growth on the interest earned.
TFSA Savings Accounts
TFSA savings accounts are a simple and low-risk option for those looking to save money within a TFSA. These accounts can offer interest rates slightly higher than regular savings accounts, and the interest earned is tax-free.
TFSA Trading Accounts
You can open a TFSA brokerage account for more investment options. These accounts allow you to buy and sell individual stocks, ETFs, options, and other securities within your TFSA. For low fees and great customer service, Qtrade is an excellent choice for Canadians looking to self-manage their TFSA trading accounts. If you are a passive investor, robo-advisors are a popular choice as they automate your investments depending on your risk tolerance.
TFSA Mutual Funds
You can also invest in mutual funds using your TFSA. These are generally actively managed by a portfolio manager and contain stocks, bonds, or a combination. You’ll still receive tax-free returns, though management fees are usually higher than passive options.
Best TFSA Accounts In Canada 2024
| Account | TFSA Savings Account Interest Rate | TFSA Minimum Balance | GIC Interest Rate | GIC Minimum Balance |
| EQ Bank | 3.00% | N/A | 5.35%-3.80%(3 months -10 years GIC) | $100 |
| Tangerine | 0.70% | $0 | 5.20%-3.50% (90 days- 5 year GIC) | N/A |
| Motive Financial | 4.10% | $0 | 5.40%-4.30%(1-10 year GIC) | $1,000 |
| Oaken Financial | 3.40% | $0 | 5.35%-4.50%(1-5 year GIC) | $1,000 |
| Achieva Financial | 3.60% | $0 | 5.20%-4.55%(1-5 year GIC) | $1,000 |
| Steinbach Credit Union | 4.05% | $1 | 5.0%-4.25%(1-5 year GIC) | $500 |
| Canadian Tire Bank | 3.70% | $0 | 4.50%-3.80%(1-5 year GIC) | $1,000 |
EQ Bank
EQ Bank offers a variety of GIC term lengths, from three months to ten years. Their low balance requirements are broadly accessible, and the Savings Plus account features a substantial rate. You can’t go wrong with their TFSA products.
Our Take: EQ Bank TFSA Savings Plus Account
The Savings Plus Account offers a considerable interest rate of 3.00% on all balances. With no monthly fees and flexible withdrawals, it is an ideal TFSA option for those who want to earn top returns while maintaining easy access to their funds.
- 3.00% interest rate on all balances
- No minimum balance required
- CDIC insured
Our Take: EQ Bank TFSA GICs
Those looking to lock in a fixed rate can turn to EQ Bank’s TFSA GICs. Their competitive rates span an extended term length selection. You’ll find seemingly any term length desired. Additionally, their GICs maintain a low minimum balance of $100 and the added security of CDIC insurance.
| Term Length | Annual Rate (%) |
| 3 Months | 4.00% |
| 6 months | 4.75% |
| 9 months | 5.00% |
| 1 Year | 5.35% |
| 15 Months | 5.20% |
| 2 Years | 5.00% |
| 27 Months | 5.00 |
| 3 Years | 4.80% |
| 4 Years | 4.60% |
| 5 Years | 4.55% |
| 6 Years | 3.80% |
| 7 Years | 3.80% |
| 10 Years | 3.80% |
Tangerine Savings Account
Tangerine offers a compelling suite of TFSA options, including savings accounts and GICs. These options provide reasonable interest rates and flexibility for Canadian savers. There is no minimum balance requirement for the GIC accounts, plus they offer a diverse number of term lengths.
Our Take: Tangerine TFSA Savings Account
The Tangerine TFSA Savings Account offers 0.70% interest on all balances. It’s lower than many competitors’ rates but is an option for those preferring to bank with Tangerine and want zero risk..
- 0.70% interest rate on all balances
- No minimum balance required
- CDIC insured
Our Take: Tangerine TFSA GICs
Tangerine offers many short-term GIC options. Otherwise, they have standard term lengths, ranging up to five years. While Tangerine’s TFSA GIC rates may not be the highest in the market, they remain competitive and come with the added security of CDIC insurance.
| Term Length | Annual Rate (%) |
| 90 Days | 3.50% |
| 180 Days | 4.75% |
| 270 Days | 5.15% |
| 1 Year | 5.20% |
| 1.5 Years | 4.80% |
| 2 Years | 4.10% |
| 3 Years | 4.00% |
| 4 Years | 3.80% |
| 5 Years | 3.75% |
Motive Financial
Motive Financial stands out for its market-leading interest rate on the Savvy Savings Account. It also offers a robust lineup of TFSA GICs with terms of up to 10 years.
Our Take: Motive Financial TFSA Savings Account
The Motive Financial Savvy Savings Account offers an impressive 4.10% interest rate on all balances, with no minimum balance requirements or monthly fees. This makes it an exceptional choice for TFSA savers who want to maximize the growth of their tax-free funds while maintaining easy access to their money.
- 4.10% interest rate on all balances
- No minimum balance required
- Withdraw anytime
- CDIC insured
Our Take: Motive Financial TFSA GICs
Motive Financial’s TFSA GIC lineup offers competitive rates across 1 to 10-year terms. The minimum deposit of $1,000 is higher than alternatives.
| Term Length | Annual Rate (%) |
| 1 Year | 5.40% |
| 2 Years | 5.10% |
| 3 Years | 4.65% |
| 4 Years | 4.50% |
| 5 Years | 4.35% |
| 6 Years | 4.30% |
| 7 Years | 4.60% |
| 8 Years | 4.60% |
| 9 Years | 4.60% |
| 10 Years | 4.60% |
Oaken Financial
Oaken Financial stands out for competitive short-term TFSA GIC rates. Otherwise, their TFSA Savings Account rate offers competitive rates. Overall, it’s a well-balanced option.
Our Take: Oaken Financial TFSA Savings Account
Oaken Financial’s TFSA Savings Account provides a strong 3.40% interest rate on all balances, with no minimum balance requirements.
- 3.40% interest rate on all balances
- No minimum balance required
- CDIC insured
Our Take: Oaken Financial TFSA GICs
Oaken Financial has some of the highest GIC rates in the market. You’ll currently receive 5.35% on term lengths up to 18 months. Otherwise, their five-year terms currently offer 4.50%. The minimum deposit of $1,000 ensures accessibility for a wide range of savers.
| Term Length | Annual Rate (%) |
| 1 Year | 5.35% |
| 18 Months | 5.35% |
| 2 Years | 5.20% |
| 3 Years | 4.80% |
| 4 Years | 4.60% |
| 5 Years | 4.50% |
Achieva Financial
Achieva Financial is a top TFSA contender due to its highly competitive GIC rates and strong savings account interest rates. Their TFSA GIC lineup boasts some of the highest fixed rates in the market. Meanwhile, their TFSA Savings Account also carries a strong interest rate.
Our Take: Achieva Financial TFSA Savings Account
With a 3.60% interest rate on all balances and no minimum balance requirements, Achieva Financial’s TFSA Savings Account provides a strong return on your tax-free savings while allowing easy access to your funds through unlimited free transfers and withdrawals.
- 3.60% interest rate on all balances
- No minimum balance required
- Deposit Guarantee Corporation of Manitoba insured
Our Take: Achieva Financial TFSA GICs
Achieva Financial’s TFSA GIC lineup features some of the highest fixed rates in the market across various terms.
| Term Length | Annual Rate (%) |
| 1 Year | 5.00% |
| 2 Years | 4.80% |
| 3 Years | 4.60% |
| 4 Years | 4.50% |
| 5 Years | 4.40% |
Steinbach Credit Union
Steinbach Credit Union has a unique approach to GICs. This credit union offers tiered rates, catering to high rollers. This is complemented by coverage from the Deposit Guarantee Corporation of Manitoba, protecting your funds without limit.
Our Take: Steinbach Credit Union TFSA Savings Account
With a remarkable 4.05% interest rate and no minimum balance requirements, this TFSA Savings Account provides an outstanding return on your tax-free savings. The core drawback is you’ll only receive accumulated interest in one annual distribution.
- 4.05% interest rate on all balances
- Interest is paid annually on December 31
- Deposit Guarantee Corporation of Manitoba insured
Our Take: Steinbach Credit Union TFSA GICs
Steinbach’s TFSA GIC lineup features competitive fixed rates across various terms. Their attractive rates range from one to five-year terms. The interest rates on the GICs are tiered based on the deposit amount.
There are three deposit tiers: under $100,000, from $100,000 to $249,999, and over $250,000. Higher deposit amounts qualify for higher interest rates, incentivizing more significant investments.
| Term Length | Annual Rate (%) |
| 1 Year | 4.90% – 5.00% |
| 2 Years | 4.70% – 4.80% |
| 3 Years | 4.40% – 4.50% |
| 4 Years | 4.35% – 4.45% |
| 5 Years | 4.25% – 4.35% |
Canadian Tire Bank
Canadian Tire Bank presents an appealing option for those already in the Canadian Tire ecosystem. Their TFSA savings account offers a competitive rate, but better GIC options exist.
Our Take: Canadian Tire Tax Free® Savings Accounts
For Canadian Tire Bank customers already engaged with the Canadian Tire ecosystem, the TFSA Savings Account can be a convenient choice. You’ll earn a solid 3.70% interest rate on all balances, with no minimum balance requirement.
- 3.70% interest rate on all balances
- No minimum balance required
- CDIC insured
Our Take: Canadian Tire Tax Free® GIC Account
While Canadian Tire Bank offers TFSA GICs, its rates aren’t as competitive as those of other financial institutions. For TFSA investors seeking higher guaranteed returns on their fixed-income investments, exploring alternative options with more attractive GIC rates may be beneficial.
| Term Length | Annual Rate (%) |
| 1 Year | 4.50% |
| 2 Years | 4.10% |
| 3 Years | 4.03% |
| 4 Years | 3.94% |
| 5 Years | 3.80% |
How Does A TFSA Work?
A Tax-Free Savings Account is a registered account allowing Canadians aged 18 and over to save and invest money without taxing any investment income or capital gains earned within the account. The TFSA is a flexible savings vehicle that can be used for various purposes, such as saving for retirement, a down payment on a home, or building an emergency fund.
Unlike a Registered Retirement Savings Plan, contributions to a TFSA are made with after-tax dollars, but all investment growth and withdrawals are tax-free. This means the money you earn from your TFSA investments isn’t liable to taxes.
Additionally, any withdrawals from a TFSA do not affect your eligibility for federal income-tested benefits and credits, such as the Guaranteed Income Supplement (GIS) or the Canada Child Benefit (CCB).
Benefits Of The Best TFSA Accounts In Canada
- Tax-Free Growth: The primary benefit of a TFSA is that any investment income, dividends, and capital gains earned within the account are tax-free. This means you can maximize your savings and investment growth without worrying about paying taxes on the earnings.
- Flexibility: TFSAs offer flexibility in terms of contributions and withdrawals. You can contribute up to the annual limit each year, and withdrawn funds can be re-contributed in future years without penalty, subject to your remaining contribution room. You also don’t need to have an income to contribute.
- Withdrawals Are Not Income: Withdrawals from your TFSA contributions are not considered income. This means they won’t affect any government benefits you receive that are affected by income earned.
- Estate Planning: Unlike RRSPs, TFSAs do not require mandatory withdrawals or tax payments upon the account holder’s death. The TFSA can be transferred tax-free to a spouse or common-law partner or distributed to other beneficiaries as part of your estate.
TFSA Contributions
The TFSA contribution room is determined by the Canada Revenue Agency (CRA) and is subject to annual limits and adjustments. Here are the key points to remember about TFSA contributions:
- The annual TFSA contribution limit for 2024 is $7,000.
- Any unused contribution room will be carried forward to future years.
- If you withdraw funds from your TFSA, the withdrawn amount is added back to your contribution room at the beginning of the following calendar year.
- Over-contributions to a TFSA are subject to a monthly penalty tax of 1% on the excess amount.
What Do You Need To Open A TFSA?
Opening a TFSA is a straightforward process. Here’s what you typically need:
- Social Insurance Number (SIN)
- 18 years or older
- Proof of identity (e.g., driver’s license, passport)
- Personal contact information (e.g., address, phone number, email)
- Information about your investment objectives and risk tolerance (for investment accounts)
You can open a TFSA through various financial institutions, such as banks, credit unions, trust companies, and online brokerages.
Bottom Line: The Best TFSA Accounts In Canada
As you navigate the landscape of TFSA options in Canada, it’s essential to focus on finding the right balance of growth, safety, and flexibility to align with your unique financial goals and risk tolerance. By carefully evaluating factors like interest rates, fees, and account features, you can identify TFSA products that will truly optimize the tax-free growth potential of your savings and investments.
Whichever TFSA path you choose, it’s critical to understand and leverage the inherent advantages of this powerful savings tool. From the ability to make tax-free withdrawals to the estate planning flexibility it affords, a well-designed TFSA strategy can be a game-changer in helping you achieve both your short-term and long-term financial objectives.
