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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

AccountTFSA Savings Account Interest RateTFSA Minimum BalanceGIC Interest RateGIC Minimum Balance
EQ Bank 3.00%N/A5.35%-3.80%(3 months -10 years GIC)$100
Tangerine 0.70%$05.20%-3.50% (90 days- 5 year GIC)N/A
Motive Financial4.10%$05.40%-4.30%(1-10 year GIC)$1,000
Oaken Financial 3.40%$05.35%-4.50%(1-5 year GIC)$1,000
Achieva Financial 3.60%$05.20%-4.55%(1-5 year GIC)$1,000
Steinbach Credit Union 4.05%$15.0%-4.25%(1-5 year GIC)$500
Canadian Tire Bank3.70%$04.50%-3.80%(1-5 year GIC)$1,000
eq bank

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 LengthAnnual Rate (%)
3 Months4.00%
6 months4.75%
9 months5.00%
1 Year5.35%
15 Months5.20%
2 Years5.00%
27 Months5.00
3 Years4.80%
4 Years4.60%
5 Years4.55%
6 Years3.80%
7 Years3.80%
10 Years3.80%
Tangerine

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 LengthAnnual Rate (%)
90 Days3.50%
180 Days4.75%
270 Days5.15%
1 Year5.20%
1.5 Years4.80%
2 Years4.10%
3 Years4.00%
4 Years3.80%
5 Years3.75%
Motive logo

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 LengthAnnual Rate (%)
1 Year5.40%
2 Years5.10%
3 Years4.65%
4 Years4.50%
5 Years4.35%
6 Years4.30%
7 Years4.60%
8 Years4.60%
9 Years4.60%
10 Years4.60%
Oaken Financial

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 LengthAnnual Rate (%)
1 Year5.35%
18 Months5.35%
2 Years5.20%
3 Years4.80%
4 Years4.60%
5 Years4.50%
Achieva logo

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 LengthAnnual Rate (%)
1 Year5.00%
2 Years4.80%
3 Years4.60%
4 Years4.50%
5 Years4.40%

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 LengthAnnual Rate (%)
1 Year4.90% – 5.00%
2 Years4.70% – 4.80%
3 Years4.40% – 4.50%
4 Years4.35% – 4.45% 
5 Years4.25% – 4.35% 
Canadian tire bank

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 LengthAnnual Rate (%)
1 Year4.50%
2 Years4.10%
3 Years4.03%
4 Years3.94%
5 Years3.80%

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

TFSA Benefits
  • 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.

TFSA FAQs

Can I have more than one TFSA?

Yes, you can have multiple TFSA accounts with different financial institutions. However, your total contributions across all TFSAs cannot exceed the total contribution room you have available.

What happens if I over-contribute to my TFSA?

Over-contributions to a TFSA are subject to a monthly penalty tax of 1% on the excess amount. Keeping track of your TFSA contribution room is essential to avoid over-contributing and incurring penalties.

Can I withdraw funds from my TFSA at any time?

Yes, you can withdraw funds from your TFSA at any time without paying taxes on the withdrawn amount. However, any withdrawn funds will only be added to your contribution room at the beginning of the following calendar year.

Do I have to report TFSA income on my tax return?

No, you do not need to report any investment income or capital gains earned within your TFSA on your annual tax return, as the earnings are tax-free.

Can I transfer my TFSA between financial institutions?

Yes, you can transfer your TFSA from one financial institution to another without affecting your contribution room. However, you must follow the proper transfer procedures to avoid potential tax consequences or penalties.
Lucas Elliott avatar on Loans Canada
Lucas Elliott

Lucas, a Toronto native, holds an Honours BBA (Finance) degree obtained from Wilfrid Laurier University. His career has spanned venture capital and blockchain startups. Aside from writing at Loans Canada, Lucas is a Hardbacon contributor, and content specialist at Croton Content. Additionally, his passion for exploring the world has taken him to an impressive 28 countries across Europe, North America, Asia, and Central America.

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