TFSA Interest Rate Comparison

A Tax Free Savings Account is an excellent savings vehicle. You can now qualify for up to $57,500 in TFSA contribution room (2018), making it more worthwhile to consider using it for a long-term investment strategy.

Financial institutions still promote TFSAs as strictly for savings. There’s nothing wrong with that, although if you have only a few thousand dollars in a savings account you won’t get much of a tax break. However, a TFSA is a good place to hold your emergency funds, savings for a short or medium-term goal, or the current spending bucket of your retirement money.

In this low interest rate environment, it doesn’t hurt to try to eke out some additional return. The following charts show the recent interest rates for High Interest Savings Accounts and Non-Redeemable GICs held in a TFSA.

TFSA Interest rates offered by the five major banks

  HISA 1 YR 18 MOS 2 YR 3 YR 4 YR 5 YR
BMO

0.6%

2.5% to Apr 3/18

Min. deposit $50

0.85

0.95 1.05 1.15 1.25

1.5

BNS

       1.05%

1.9* 2.1* 1.0 1.05 1.1

2.6*

CIBC

0.7%

2.3% to Mar 31/18

On new deposits

Min. deposit $25

1.25*

n/a 1.05 1.55* 1.1

1.8

RBC

       0.85%

0.9 1.05 1.25 1.35 1.5

1.6

TD

       0.85%

1.0 n/a 1.25 1.35 1.5

1.6

*Special bonus rates

TFSA Interest rates offered by on-line banks

 

HISA

1 YR 18 MOS 2 YR 3 YR 4 YR

5 YR

Simplii

1.1%

3% to Feb 28/18

1.7* n/a 1.3 2.0* 1.5

2.25*

Tangerine

1.1%

1.9% for new clients for 6 mos

2.0 2.05 2.15 2.3 2.4

2.6

EQ**

1.05%

2.1 n/a 2.45 2.65 2.7

2.9

*Special bonus rates

**TFSA available through EQ’s parent company Equitable Bank

(Interest rates current as of January 28, 2018)

Final thoughts

As you can see, the TFSA interest rates offered by our financial institutions are all over the map. Other offerings include: short-term or cashable GICs, bonus rates for certain odd terms (e.g.14 or 30 months), and special products with names like Laddered GICs and Rate Risers, and some may contain certain restrictions. Your local credit union may have other possibilities for you.

Banking sure isn’t so simple any more.

Take some time to review what’s offered so you can choose the best option for you depending on your savings goals and circumstances.

Print Friendly, PDF & Email

11 Comments

  1. Conrad on January 31, 2018 at 6:25 am

    Might want to compare some Credit Union rates. Rosenort Credit Union in sunny Manitoba pays 2.55 on TFSA not locked in.

    • boomer on January 31, 2018 at 10:32 am

      Thanks for the info Conrad. I don’t normally include Credit Unions because they are regional and rates differ widely (I limited on length:) ) That’s why I always suggest you check out your local FIs

  2. Karen T. on January 31, 2018 at 6:30 am

    I am surprised by your rate info, because I recently opened an EQ savings account and am getting 2.3%. Which is better than any of the others.

    • KC on January 31, 2018 at 10:05 am

      She’s talking about TFSA rates, not the non-TFSA

    • boomer on January 31, 2018 at 10:34 am

      @Karen T: TFSA rates have been taken from each FI’s website and are accurate as of January 28.

  3. Carl on January 31, 2018 at 6:52 am

    Oaken Financial and Acheiva Financial are both over 3% on a 5 year term GIC

    • Glenn on February 3, 2018 at 7:16 pm

      I have a firm offer to pay me 3.25% on a 5 year GIC at Westoba Credit Union in Manitoba.

  4. Gert on January 31, 2018 at 7:28 am

    What about investing TFSA in mutuals & equities?
    I started investing two years ago, prior to was a simple savings account with Tangerine. Savings with Tangerine yielded a few hundred dollars per year but investing has grown my TFSA by a little over $10,000 in just over 2 years. With an equal mix of Balanced Mutual Funds 30% & Commen Equity 70%. Now I don’t know if this is good or bad because I have nothing to compare to but it’s sure better than a simple savings account.

    • boomer on January 31, 2018 at 10:38 am

      Hi Gert. As I mentioned, TFSAs are great for long-term investing This post info is specifically for shorter term funds where safety of principal is most important.

  5. Maria on January 31, 2018 at 8:19 am

    What are you views on using Deposit Brokers who somehow seem are able to secure higher rates than those available to J.Q. Public at the very same banks or Credit Unions?

  6. Cheryl on January 31, 2018 at 8:37 am

    My TFSA is fully funded and with the most recent contribution to top off my TFSA the shift has happened and just under half the funds are in a cashable GIC with my credit union. That’s my emergency fund and I’m able to access it fairly quickly if I need it. The rest of my TFSA are split between 2 ETFs. I’m pretty sure I noticed Questrade offers GICs too, but wasn’t interested enough to check out the rates.

Leave a Comment