In this post, we’ll cover the banks and credit unions with the best TFSA savings account rates in Canada for 2023.
We’ll start with a ranking of the TFSA rates then provide a short profile of each financial institution.
If you’re looking for the best high interest savings accounts for non-registered accounts, check the linked post.
Best TFSA Rates in Canada For Savings Overview
Here are the highest TFSA interest rates available from financial institutions in Canada.
Ideal Savings currently tops the ranking with a competitive TFSA HISA rate of 3.75%.
Several other online banks, including EQ Bank, also offer a TFSA HISA rate of 3.00%.
| Financial Institution | TFSA HISA Rate (%) | Deposit Insurance |
| Ideal Savings | 3.75 | DGCM |
| AcceleRate Financial | 3.55 | DGCM |
| Hubert Financial | 3.55 | DGCM |
| Motive Financial | 3.00 | CDIC |
| WealthOne | 3.40 | CDIC |
| Achieva Financial | 3.40 | DGCM |
| Outlook Financial | 3.50 | DGCM |
| Parama Credit Union | 2.70 | FSRAO |
| Maxa Financial | 2.15 | DGCM |
| Peoples Trust | 2.50 | CDIC |
| Entegra Credit Union | 3.40 | DGCM |
| Motusbank | 2.50 | CDIC |
| EQ Bank | 3.00 | CDIC |
| Canadian Tire Bank | 3.00 | CDIC |
| Alterna Bank | 2.50 | FSRAO |
Related: Best Savings Rate for Non-registered Accounts.
10 Best TFSA Rates in Canada For Savings
The following is a detailed review of the best TFSA savings account rates in Canada at the moment.
1. EQ Bank TFSA Savings Account
EQ Bank is known as one of the best online banks with non-promotional rates on their EQ Bank Savings Plus account.
And after many years without a registered account offering, they finally added TFSA and RSP savings accounts in 2020.
With a current rate of 3.00, the EQ Bank TFSA Savings account currently has one of the highest rate among the Canadian banks. Here are some other features of the account:
- No minimum balance
- Zero fees
- Easy only sign-up process
To open the TFSA account, you’ll need to start with an EQ Bank Savings Plus account with a rate of 2.50%
After you’ve successfully opened the regular savings, you’ll be able to open the TFSA or RSP account from your online banking profile (web or mobile app).
Will this rate last? Maybe not. But if you’re worried about this, you can lock in the rate by investing in their 3-month GIC.
Check this post to compare the best TFSA GIC Rates.
Related Posts:
- EQ Bank Review: Best Savings Account in Canada
- EQ Bank TFSA and RSP Accounts Review
- EQ Bank GICs Review (Rates and Features)
2. Canadian Tire TFSA HISA
With a regular TFSA rate of 3.00%, Canadian Tire Bank has the second highest rate in this TFSA savings account ranking.
In addition, it has the highest non-promotional rate on a high interest savings account. The bank is CDIC insured so your deposits are covered up to $100,000 in the TFSA.
You also get an account with no minimum opening balance, monthly fees or lock-in period. Check here to learn more about the accounts feature.
But be warned! Account opening is quite manual and will take weeks to over a month to complete.
Related Post: Canadian Tire TFSA Review
3. Steinbach Credit Union TFSA
Steinbach is one of Canada’s largest credit union and Manitoba’s largest. It currently serves over 90,000 members with over $6 billion in assets.
Here are the key features of the Steinbach TFSA Variable Savings account:
- TFSA Savings account rate of up to 3.75%
- Fully guaranteed through Deposit Guarantee Insurance of Manitoba
- Interest calculated on the minimum monthly balance
- Interest is only paid annually on December 31
To open the TFSA account, you’ll be required to apply for its regular high-interest savings account with a tiered savings rate starting at 3.70%. Apply for the account online here.
4. Motive Financial TFSA
Motive Financial is an Alberta based online-only bank and a division of Canadian Western Bank (CWB). CWB is a member of CDIC so your deposits are protected up to $100,000.
The bank has a competitive rate of 3.00% on the Motive TFSA Savings account. There are no minimum balance requirements or monthly fees.
There’s a fee of $50 if you close the account within a year of opening it or transfer it to another financial institution.
Learn more about TFSA and RRSP Transfer fees and the banks that reimburse them in this post.
5. WealthONE Tax-Free Savings Account
WealthOne Bank is a CDIC-insured Schedule I bank that was setup in 2016 to serve the Chinese community in Canada. It is a digital bank but also has retail locations in GTA, Ontario and Vancouver, British Columbia.
The tax-free savings account has a decent savings rate of 3.40%, the same rate on its regular and RRSP accounts.
6. Peoples Trust TFSA
Peoples Trust is a division of Peoples Group, a financial group proving services across banking, commercial lending, payments and card and many more. It is a trust company that is based in Vancouver but serves customers across Canada.
Like its non-registered e-savings account, the Tax-free accounts has a competitive rate of 3.00%. Deposit guarantee is provided through CDIC.
Peoples Trust does not charge for TFSA transfers to other financial institution and will not reimburse for any transfers in.
Related Post: Peoples Trust Review
7. Entegra Credit Union TFSA
Entegra Credit Union is a Manitoba-based credit union that has been serving Canadians since 1960. It is one of the largest credit unions in Manitoba with assets under administration of $750 million.
The credit union is the parent for Implicity Financial, another bank with one of the best TFSA savings rate in Canada.
It has a TFSA savings rate of 3.40% and your investment is 100% secured through the Deposit Guarantee Corporation of Manitoba.
Note: Entegra Credit Union has merged with Assiniboine Credit Union.
8. AcceleRate Financial TFSA
AcceleRate Financial is another Manitoba-based financial institution and the virtual division of Access Credit Union.
With the AcceleRate Tax-free Savings Accounts, you get the following:
- No minimum balance required
- Competitive savings rate of 3.55%
- No monthly maintenance fees
- 100% protection through DGCM
You may also invest in the AcceleRate TFSA GICs with a minimum deposit of $1,000.
Related Post: Accelerate Financial Review
9. Alterna Bank TFSA
Alterna Bank is a CDIC-member online bank. They are based in Ontario and have been serving Canadians for over 110 years.
The current rate on the Tax Free eSavings Account is 2.50%. There are no fees or minimum balance required.
10. Maxa Financial TFSA
Maxa Financial was launched in 2006 and is an online division of Westoba Credit Union, one of the largest credit unions in Manitoba with over 38,000 members.
It offers high-interest savings accounts for both non-registered and registered accounts including TFSA, RRSP and RRIF.
The HISA rate is currently 3.35% and your deposits are guaranteed through DGCM.
Learn more: MAXA Financial Review
Other Notable TFSA Rates in Canada
There are other online banks and credit unions with decent TFSA rates that did not make the ranking of the best TFSA Savings Account Rates above:
| Financial Institution | TFSA Rate (%) |
| Hubert Financial | 3.55 |
| Outlook Financial | 3.50 |
| Motusbank | 2.50 |
| Ideal Savings | 3.75 |
| Parama Credit Union | 2.70 |
How to Choose the Best TFSA Account in Canada
When it comes to choosing the best TFSA account in Canada, you want to look beyond the interest rate to make an informed decision.
Accordingly, the following are the other key factors to consider when choosing the best TFSA savings account.
- Monthly fees
- Minimum balance
- Eligibility
- Accessibility
- Deposit protection
The idea is to take into consideration any factor that will impact your account usage so as to maximize the purpose of the account.
So while you can’t go wrong with Motive TFSA as the overall best, the above factors will help you to choose the perfect account.
Promotional High Interest TFSA Rates in Canada
The TFSA savings rate above are non-promotional. But you can get a slightly higher promotional rate through some banks for a limited time.
Here are some banks with promotional rates on their TFSA accounts:
Tangerine TFSA Savings Account
New clients can get an introductory rate of 5.00% on their savings account for the first 5 months at Tangerine. The promotion applies to both non-registered and registered accounts including RSP, RIFs and TFSAs.
The Tangerine savings have no account maintenance fees or minimum balances. And you have access to free Interac transfers and access to 3,500 Scotiabank ATMs through the Tangerine Chequing Account.
The current promotion runs till July 17, 2023 after which the rate drops to 1.00%.
CIBC TFSA Savings
At 2.75%, the promotional rate on CIBC’s TFSA account is lower than the regular rates of some of the online banks and credit unions above.
The minimum investment is $25 and there are no monthly fees. The offer is available to new accounts opened during the offer period. Existing accounts can also get the higher rate on additional deposits during the period.
The promotion ended in March 31, 2023 and the rates are now back at 0.50%.
What is TFSA?
Tax-free Savings Account is a tax-advantaged account that allows Canadians to save, invest and grow their investments completely tax-free. But TFSAs are more than savings accounts. You can also invest using several other investment types such as stocks, GICs, mutual funds and so on.
It is one of the most popular tax-advantaged accounts around, with over 14 million TFSA accountholders as at 2018. Check this post on TFSA statistics for other data on TFSA adoption and usage.
Eligibility starts at age 18 for Canadian citizens or residents. Unlike an RRSP, you don’t need to file your taxes or earned income in the previous year to contribute to an RRSP.
Learn more:
- Beginner’s Guide to TFSA (How To Start Investing With TFSA)
- Can I have Multiple TFSA accounts?
TSFA Contribution Limits
Someone that was 18 and a Canadian resident in 2009 when TFSA was introduced would have accumulated a total TFSA contribution room of $88,000 in 2023.
The TFSA contribution limit is simply how much you can contribute to your TFSA in a year. While you can have more than one TFSA, the TFSA limit applies to your contributions across all the accounts.
It is calculated as the sum of the 3 components below:
- TFSA annual dollar limit (The limit is $6,500 for 2023 contribution year)
- Unused contribution room from previous years
- Withdrawals from the previous year
The annual dollar limit is indexed to inflation but rounded to the nearest $500. CRA announces the applicable limit annually.
If you contribute more than your allowable TFSA contribution limit, there is a penalty of 1% tax per month on the excess amount. The penalty is similar to the one for RRSP over-contributions, but it is more punitive because there’s no excess buffer.
With RRSPs, the first $2,000 over-contributions will not be taxed. TFSAs don’t have this buffer.
Therefore, it is important to know your TFSA contribution limit and keep track of your TFSA contributions all year long to avoid the over-contribution penalties.
You can download the TFSA contribution tracker in this post to monitor how much to put in all your TFSA accounts in a year.
Are TFSA Savings Accounts Safe?
Like other accounts at your financial institution, your TFSA Savings accounts will be guaranteed through either CDIC or the provincial deposit insurer.
With CDIC, funds in a TFSA are treated as a separate insured category. That means, they are protected up to $100,000 with a member institution.
But you can get more protection at many provincial insurers. For example, DGCM (Manitoba) provides a 100% guarantee on deposits in all accounts.
FSRA (Ontario) is capped at 250,000 for non-registered accounts but unlimited for registered accounts.
Alternatives to TFSA High Interest Savings Accounts
Given their tax advantages, it makes sense that TFSA contribution room is capped. To make the most of the limited room, you may want to use your TFSA for higher yielding assets.
But a savings account, especially a high interest account, can play an important role in a diversified investment portfolio. Your risk tolerance or investment horizon may suggest having an asset allocation with exposure to low-risk investments.
For example, a HISA will be better suited for savings for a car’s down payment or vacation than equities. So depending on your financial goals, any of the other asset types below can be alternatives to a TFSA HISA.
- Guaranteed Investment Certificates: Like HISA, GICs are also low-risk and your principal plus interest is guaranteed.
- Bonds: Higher risk than GICs, but generally less risky or volatile than equities.
- Equities: Higher risk but can also deliver higher returns.
- Asset Allocation ETFs: These are a quick way to build a portfolio with broad diversification. With different equities/bonds mix, you can easily find one that reflects the level of risk you’re willing to take.
Related Posts:
- Understanding Guaranteed Investment Certificates (GICs) in Canada
- How to start investing in Canada for Beginners
- How To Build A Diversified Investment Portfolio (3 Quick & Easy Ways)
FAQs on TFSA Savings Account Rates in Canada
Ideal Savings has the best TFSA savings rate at 3.75%. Hubert Financial and AcceleRate Financial also offer up to 3.55%.
It depends on your risk tolerance and investment objectives. If you’re savings for short term goals, you should be conservative and invest in a HISA or GIC. For longer term goals, like retirement, you have several options including equities, bonds, REITs and so on
You can hold several asset types in a TFSAs, including savings account. The only difference between a TFSA savings and the regular savings is that your returns will be tax-free. However, TFSA contribution room is limited so holding a savings account in it may not be the best use of the room.
The TFSA dollar limit for 2023 is $6,500. However, your contribution limit may be higher if you have unused contribution room from previous years or made withdrawals in the prior year.
Yes, you can open as many TFSA accounts as you like. In fact, 3 out of 10 TFSA accountholders have multiple accounts. Having more than one account may make it difficult to keep track of your contribution limit. But as long as you don’t exceed your limit, you’ll have no issues with CRA.
You may have to pay a 1% penalty per month on the highest excess amount during the month. The penalty will continue until the excess contribution is eliminated by either withdrawals or the dollar limit for the next year.
Any resident of Canada with a valid SIN and aged 18 years or older can open and contribute to a TFSA. Non-residents with a valid SIN can also open a TFSA, but they can’t contribute to the account. If they do, the contribution will be subject to the over-contribution penalty of 1% per month.
The TFSA can be transferred tax-free to your spouse or common-law partner if you’ve designated them as a successor holder or beneficiary. You can make this designation through your TFSA provider if you live in a province that allows beneficiary designation. You can also transfer the TFSA to other beneficiaries that are not a spouse. You can learn more about what happens to TFSA at death here.
Conclusion
This post covers at the best rates available on tax-free savings accounts in Canada. To get the best rates on non-registered accounts or GICs, check the other posts linked below.
Related Posts:
- Best GIC Rates for Registered Accounts
- The Best Personal Finance Apps and Tools For Canadians
