With three out of four Canadians listing elevated savings as their top financial priority, it’s no wonder that there are a wide variety of investment and savings products available to Canadian adults. One of the most popular vehicles for saving in Canada is the Tax-Free Savings Account. Also known as a TFSA, it is a savings option for people over the age of 18 that allows them to save money without paying taxes on it. To open a TFSA, you must:
- Be a Canadian citizen
- Be over the age of 18
- Have a social insurance number (SIN)
While savings in a TFSA aren’t subject to income tax, it’s important to note that contributions to a TFSA are not tax-deductible.
Many financial institutions offer TFSAs, including banks, credit unions, insurance companies, and trust companies. If you’re looking for a TFSA with a more flexible institution, look no further than Tangerine Bank. Tangerine offers a high return on investment and no fees when you sign up for its tax-free savings account.
Who Is Tangerine?
Originally launched as ING Direct in 1997, Tangerine Bank changed its name in 2012 after being acquired by Scotiabank. Seeking to offer a business model without the formality and restrictions of traditional banks, Tangerine doesn’t operate through expensive branches across the city. Their method of Forward Banking allows customers to access their accounts and services online, through their phone, or through Tangerine contact centers.
Tangerine is a progressive alternative to the big banks. Innovative and simple, they offer an approach to banking that puts customers first. They offer award-winning client service, low fees, and high interest.
Tangerine’s Tax-Free Accounts
Tangerine offers a variety of tax-free products to customers, specifically a tax-free savings account (TSFA) and a tax-free guaranteed investment account.
Tax-Free Savings Account (TFSA)
Tangerine’s TFSA is similar to their regular savings account in the way that there are no minimum account balances or service charges. Their TFSA, of course, allows customers to gain interest and make withdrawals. without paying tax.
- Account fee: $0
- Minimum balance: $0
- Interest Rate: 0.70%
- Free transfers and withdrawals
- Insurance: CDIC insured up to $100,000
Tax-Free Guaranteed Investment Account
Tangerine’s Tax-Free Guaranteed Investment Account is similar to the original TFSA, albeit with a set term in place. Also known as a GIC (Guaranteed Investment Certificate), this account offers an overall higher percentage of interest if you keep your money in the account for a set period of time.
- Account fee: $0
- Minimum balance: $0
- Interest Rate: Up to 5.20%
- Free transfers and withdrawals
- Insurance: CDIC-insured up to $100,000
Here’s a list of Tangerine’s interest rates and corresponding term-length commitments for their guaranteed investment account:
| 90 days | 1.40% |
| 180 days | 4.90% |
| 270 days | 5.20% |
| 1 year | 5.15% |
| 1.5 years | 4.80% |
| 2 years | 4.10% |
| 3 years | 4.00% |
| 4 years | 3.80% |
| 5 years | 3.75% |
What happens to your TFSA when you die?
Pros And Cons Of Opening The Tangerine TFSA Account
Before opening up any bank or investment account, it’s important to consider all factors. Here are some pros and cons in opening a Tangerine TFSA Account:
Pros
- High Intro Interest Rate – Tangerine offers a variety of competitive interest rates for all their savings accounts.
- Tax-Free Gains – Avoid paying taxes on up to $6,000 or more (Depending on the year).
- No Fees – Tangerine is one of the only banks that don’t have any fees on their TFSAs.
- No Minimum Balance – You don’t have to worry about keeping a set amount of money in the account at a given time.
- Flexibility – Tangerine’s progressive banking model offers
Cons
- All Online – Customers who aren’t technologically inclined might find Tangerine’s lack of branches inconvenient:
- Transfer Fee Funds – Transferring your TFSA costs $50 with Tangerine.
- No Cash Deposits – People who get paid in cash, or who have cash they would like to deposit in general, would have trouble easily depositing their funds.
- Low-Interest Rate – When compared to other online banks, Tangerine’s interest rates are competitive, but remain low compared to other online banks.
How To Open A Tangerine TFSA Account?
To be eligible to open a TFSA, you must be a Canadian adult (over 18) with a social insurance number (SIN). To apply for a TFSA with Tangerine, create an account here.
Tangerine Tax-Free Savings Account FAQs
How do I transfer funds to my Tangerine TFSA?
How much does it cost to transfer my TFSA account from my current bank to Tangerine?
Does Tangerine offer any other savings accounts?
- Tax-Free Savings Account
- Registered Retirement Savings Plans (RRSP); and
- Everyday savings accounts.
Can I buy stocks with Tangerine TFSA?
Can I close my Tangerine TFSA account online?
What is the TFSA contribution limit?
Interested in more Tangerine products? Check out their World Mastercard and Money-Back Credit Card.
Bottom Line
TFSAs are a great savings account option for people that want to plan for their future and save money without having to pay income tax on the interest generated, or on the funds deposited. Tangerine’s tax-free savings account is a great option for people interested in banking without the frills of in-branch banks.
