Canadian Tire TFSA Review: High Interest But Is it Right For You?

You’re probably familiar with the Canadian Tire retail stores and its Triangle Credit Cards. But do you know it has one of the best high interest savings account rates in Canada?

Well, you’re not alone if you don’t.

This post provides a Canadian Tire TFSA review covering its account types, fees, rates, how to open an account and how it stacks up against its competitors.

Ready? Let’s begin…

About Canadian Tire

Canadian Tire Bank is the financial services arm of Canadian Tire Corporation, a company with several popular retail brands that has been serving Canadians since 1922.

While Its primary purpose is to market the Triangle™ credit cards, Canadian Tire Bank also provides other banking products such as high interest savings account, GICs and TFSA.

The bank is CDIC insured so you can be rest assured that your money has one of the best protection available to deposits in Canada.

Canadian Tire TFSA

The Canadian Tire Tax-free Savings Account has 2 variants: a high interest savings account (HISA) and Guaranteed Investment Certificate (GIC).

Canadian Tire Tax Free HISA

Want to earn a decent rate on your money while having access to it at a short notice? Then the Canadian Tire HISA may be perfect for you.

Canadian Tire has one of the highest TFSA savings rate in Canada.

Here are some of the features of the high interest savings account:

• Enjoy one of the highest interest rates in Canada – currently 3.00%
• No minimums or monthly fees
• No lock-in periods
• Transfer funds online or over the phone

Related Post: Best High Interest Savings Accounts

Canadian Tire Tax Free GIC

In general, you will expect to earn a higher interest rate on your savings if you lock it in by investing in a GIC. But that’s not the case with Canadian Tire.

The Canadian Tire GIC Rates are below:

• 1-year: 5.30%

• 2-year: 5.30%

• 3-year: 5.20%

• 4-year: 4.97%

• 5-year: 5.03%

The GIC rates apply to both non-registered and TFSA GICs. You can check the posts below for a ranking of the best GIC rates in Canada to see how Canadian Tire compare.

• Best TFSA GIC Rates
• Best GIC Rates (non-registered accounts)

Some of the key features of the Canadian Tire TFSA GIC include:

• Minimum investment of $1,000
• Terms ranging from 1 year to 5 years
• Choice of interest at maturity or annually
• Competitive rates that are guaranteed for the entire term

Per the bank, there are 2 GIC variants: redeemable GICs and non-redeemable GICs. Of course, the redeemable GICs will have slightly lower rates.

The non-redeemable GICs can only be terminated before maturity in a few instances such as if the holder dies or moves to Quebec or outside Canada. Interest will be paid up to the date of the termination.

You can also terminate your non-redeemable GICs at Canadian Tire if you’re trying to eliminate a TFSA over-contribution or transfer your account to another bank. In both cases, you’ll forfeit any interest you’ve accrued up to that date.

Canadian Tire TFSA Fees

The Canadian Tire TFSA HISA and GICs have a few fees you should be aware of.

But a quick glance at the list below will reveal that they’re generally nothing to worry about.

This is because you can easily avoid many of the fees on your regular banking transactions. For example, you can transfer funds into the account and to your linked accounts without paying any fees.

If you’re just looking for a place to keep your cash and earn higher rates, the fees below shouldn’t be a problem. 

• Transfer account to other financial institutions: $50
• Canadian Dollar Drafts/ cheques: $5
• CAD Wire Transfer to a non-linked external account: $20
• Wire transfer to foreign financial institutions: $30
• Non-sufficient funds fees: $30
• Overdraft: $5
• Inactive accounts (2 years): $20
• Inactive accounts (after 5 years): $30

Read more: TFSA & RRSP Transfer Fees

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How to Open a Canadian Tire TFSA

The basic requirements for opening a Canadian Tire account are:

• Canadian resident
• Have a valid SIN
• At least 12 years (but you can’t contribute to a TFSA until you are 18)
• A cheque from another financial institution

If you’re used to the easy, seamless, and quick account opening process at some of the online banks like EQ Bank, you’ll be disappointed.

To get started, you can complete the application form on their website or download the form. Alternatively, you can call their customer service to apply over the phone.

After this step, you’ll receive an application instruction kit in the mail with additional guidelines on completing the application and funding your account.

So how long does it take to open a new Canadian Tire Bank account?

In my experience and from several other reports online, you should expect it to last for up to a month (and more in many instances).

But the account opening process for a new TFSA will be much faster if you’re an existing customer since they have your information already. Simply call their customer service at 1-866-681-CTFS (2837) to open a TFSA HISA or GIC.

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Pros and Cons of Canadian Tire

Pros:

• Competitive rate on the high interest savings account
• No minimums and no monthly fees
• Deposit guarantee through CDIC

Cons:

• Long and manual account opening process
• Not suitable for everyday banking
• Not available for Quebec residents
• Linking an external account is a pain

Canadian Tire TFSA vs Competitors

The Canadian Bank TFSA HISA compares favourably with other online banks and credit bureaus as shown below:

• Motive: 4.10%

• Steinbach: 3.80%

• EQ Bank: 3.00%

• Tangerine: 1%

Check this post on the best TFSA savings accounts in Canada to see how Canadian Tire TFSA compares.

Canadian Tire TFSA vs EQ Bank TFSA

EQ Bank 3.00% TFSA HISA rate is is the same with that of Canadian Tire TFSA HISA. But the savings rate doesn’t tell the whole story.

EQ Bank also provides competitive GICs with terms as short as 3 months and as long as 10 years. The account opening process at EQ Bank is simple and can be done entirely online if they can confirm your identity using one of the credit bureaus.

So if you’re simply looking to invest in a GIC account, EQ Bank clearly has a better offering than Canadian Tire.

Check this post to learn more about EQ Bank GICs and also read my EQ Bank TFSA Review.

Is Canadian Tire Bank Safe?

Canadian Tire Bank is safe. It is an arm of one of the biggest retailers in Canada with almost 100 years history.

Also, your deposits are protected through CDIC coverage. The coverage is $100,000 per insured category. Meaning, you can put $100,000 each in the Canadian Tire TFSA and the regular, non-registered accounts.

Learn more about how CDIC protection works and how to maximize the CDIC coverage here.

FAQs

Conclusion

You may have some issues with the account opening process and the manual processes at Canadian Tire Bank. But you can’t deny the decent interest rates you’ll be getting on the account once opened.

That is, the additional interest should more than compensate for any of the cons of the bank.

So if you want a non-registered HISA, you should definitely consider opening a Canadian Bank account. For TFSAs, you’re better off going with EQ Bank unless you’ve reached the CDIC coverage limit with the bank.

If you liked this post about Canadian Tire TFSA, also check the other ones below:

• Wealthsimple TFSA Review: Everything You Need To Know
• 9 Costly TFSA Mistakes to Know and Avoid
• Can I Have A Joint TFSA?