The tax-free savings account (TFSA) is an excellent savings tool for Canadians to earn interest without paying a share of it to the government.
While TFSAs can hold all sorts of investments, a TFSA can also function as a straightforward savings account, simply holding cash. However, the “tax-free” part only applies to income earned within the account, such as dividends or interest—not on your account contributions. That said, not all TFSA accounts are creating equal. To help you find the right account for you, Forbes Advisor Canada has searched the country to find the TFSA savings accounts with the highest interest rates and lowest fees.
We’ve compared 11 tax-free savings accounts at 39 nationally available banks and credit unions to find some of the best options available. See below to learn more about why we picked each account, the pros and cons, and any additional details.
‘To create this list, Forbes Advisor Canada analyzed 11 tax-free savings accounts at 39 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each account on 17 data points within the categories of fees, access, customer experience, digital experience, annual percentage yield, plus the minimums and balance needed to avoid monthly fees.
The following is the weighting assigned to each category:
Specific characteristics taken into consideration within each category included monthly fee, ability to waive the monthly fee, overdraft fee, NSF fee, other fees, ATM network, branch access, Better Business Bureau rating, Trustpilot rating, live chat availability, mobile app ratings, online bill pay availability, online banking access, minimum deposit requirements and minimum balance requirements.
Chequing accounts offering no or very low fees scored the highest, as did those offering low minimum requirements and high customer service and digital experience scores. To appear on this list, the chequing account must be nationally available.
Our research is based on information from the following financial institutions: RBC, TD, BMO, National Bank, CIBC, Scotiabank, UNI Financial, Canadian Western Bank, Coast Capital Savings, Digital Commerce Bank, EQ Bank, First Nations Bank of Canada, Laurentian Bank, Manulife Bank, Motus Bank, Peoples Bank of Canada, Simplii Financial, Tangerine Bank, VanCity, VersaBank, HSBC, Home Bank, ICICI Bank Canada, SBI Canada Bank, CTBC Bank, Bank of China (Canada), KEB Hana Bank Canada, Shinhan Bank Canada, Meridian Credit Union, Servus Credit Union, Envision Financial, Steinbach Credit Union, Affinity Credit Union, Prospera Credit Union, Conexus Credit Union, ConnectFirst Credit Union, Access Credit Union, Assiniboine Credit Union, Wealthsimple, Innovation Federal Credit Union, Neo Financial.
1
EQ Bank TFSA Savings Account
APY
3.00%
Minimum Deposit Requirement
$0
Monthly Maintenance Fee
$0
2
Neo High- Interest Savings Account
APY
Earn 4% interest everyday, on every dollar.
Minimum Deposit Requirement
No monthly fees and no minimum deposit required.
Other Features
Track your personalized savings goals in real time and watch your money grow.
The best banks in Canada for TFSA savings accounts are those that charge no fees, have no minimum deposits, and pay a high daily interest rate. These include EQ Bank, Alterna Bank, Motusbank and CIBC.
Most TFSA savings accounts in Canada have no monthly fees and no transaction fees, but they may not be completely free. You may be required to have a paid chequing account at the same bank to be eligible for a TFSA. Plus, there are usually fees for other TFSA investments.
To open a TFSA you have to be of the age of majority in your home province. You can open a TFSA at 18 in Alberta, Manitoba, Ontario, PEI, Quebec and Saskatchewan. In the rest of the country, you can open a TFSA when you turn 19.
Most TFSA savings accounts earn interest, but the rate varies widely between banks and accounts. The best TFSA savings accounts in Canada currently pay 3.0%, but many pay as little as 0.10%. Be sure to compare TFSA savings accounts online to find the best rate and features for your needs.
Compare TFSA savings accounts online to get the best interest rates. Look for accounts that offer high daily savings rates of 2.50% or higher. And be sure to pay attention to any fees that might apply to a related chequing account.
The TFSA contribution limit is set by the government and is $7,000 for 2024. Unused amounts carry over from the time you turn 18, even if you’ve never opened a TFSA before. If you were born in 1991 or earlier, you can contribute up to $95,000 starting in January 2024.
Contact your financial institution to close your TFSA savings account. You can withdraw your balance to any account, but be aware that your contribution room will not be returned to you until the next calendar year. You can avoid penalties by transferring your balance to another TFSA Savings account, but you may have to pay a transfer fee of around $100.
TFSA savings accounts are very safe. The CDIC insures deposits in federally-regulated financial institutions up to $100,000, so you can save with confidence that your money will be there when you need it.
