11 Best TFSA Rates In Canada (Nov 2022): Build Savings Tax-Free

Canada expanded the national TFSA contribution limit by another $6,000 in 2022. Tax-Free Savings Accounts (TFSAs) are one of the best financial tools available to Canadians, and my personal favourite.

Below, I’ll show you some of the banks that offer some of the best TFSA rates in Canada so that you can maximize your TFSA savings.

TFSA Savings Accounts – How it Works

A TFSA savings account works just like a traditional cash savings account. You’ll deposit funds into your account and can earn a monthly interest rate, depending on your total account balance.

The main difference is that there’s a limit to how much you can deposit into a TFSA compared to a traditional savings account that doesn’t have a deposit limit.

As far as TFSAs go, you’ll be able to choose between a typical low-interest TFSA offered by major banks or a high-interest savings account (HISA) offered by some of the emerging banks I’ve mentioned below.

The Best TFSA Rates In Canada: Comparison

I’ve reviewed each of these banks below in more detail. But first, here’s a brief overview comparing the best TFSA rates in Canada on savings accounts:

BankCurrent Interest Rate (2022)GICs?Website
EQ Bank2.50%YesEQ Bank TFSA Savings
AcceleRate Financial2.85%YesAcceleRate Financial TFSA
Motusbank2.10%NoMotusbank TFSA
Wealth One Bank of Canada3.00%NoWealthONE High-Interest TFSA
MAXA Financial2.60%YesMAXA Financial TFSA Savings
Hubert Financial2.85%YesHubert Financial “Happy Savings” TFSA Account
Motive Financial3.00%YesMotive Financial TFSA Savings
Peoples Trust**2.60%YesPeoples Group TFSA
Alterna Bank2.00%NoAlterna Bank TFSA Savings
Canadian Tire Bank2.40%YesCanadian Tire TFSA

Best TFSA Rates In Canada

If you’re going to use a TFSA for cash savings, then I recommend signing up for a high-interest TFSA.

Traditional banks typically offer 0.01% interest, which isn’t a great incentive to build your savings. The ones I mention below are much more than that.

With that in mind, let’s take a look at the banks offering the best TFSA rates in Canada.

1. EQ Bank TFSA

EQ BANK LOGO 2
  • TFSA Savings Rates: 2.50%
  • TFSA 1-Year GIC Rates: 5.10%
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

EQ Bank is one of the top-rated online banks in Canada. The company offers investments, savings accounts, and even provide mortgages. EQ Bank’s TFSA Savings Account offers 2.50% interest for every dollar you have saved.

Your interest rates are calculated daily and paid monthly, based on the closing amount in your account at the close of the month.

This allows you to keep track of exactly how much you’re earning from interest payments and is a great incentive to keep on contributing to your TFSA.

EQ Bank is easy to sign up for and doesn’t require you to pay any monthly maintenance fees.

You also don’t need to maintain a minimum account balance, which makes EQ Bank’s TFSA Savings Account a good choice, even if you’re just getting started saving money.

2. AcceleRate Financial TFSA

Accelerate Financial logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

AcceleRate Financial offers online banking solutions for savings, retirement, and has a highly competitive interest rate for TFSA savings accounts.

If you’re interested in earning even more interest, you can also purchase GICs with your AcceleRate TFSA savings account. The company requires a $1,000 deposit and offer excellent GIC terms.

Once you’ve accumulated the minimum $1,000 GIC investment in your AcceleRate TFSA savings account, you can transfer it directly into a GIC holding account.

You won’t be able to withdraw the money until the end of the term, but you’ll earn a higher interest rate on it.

3. Motusbank TFSA

motusbank
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

Motusbank is owned and backed by Meridian Credit Union, which is among the most reputable in Canada. The company usually offer a competitive monthly interest rate on your TFSA savings.

The one downside of Motusbank is that the company doesn’t offer any GICs or other investment vehicles to put your savings towards.

If you’re just looking for a high-interest TFSA, though, they’re definitely worth considering, as they don’t have any bogus monthly fees or require you to keep a minimum balance.

Their online banking app is also very well laid-out, easy to use, and makes it easy to keep track of your savings, so you don’t accidentally over-contribute.

4. WealthONE High-Interest TFSA

WealthONE Bank of Canada
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

WealthONE was founded in 2016, making it one of the younger banks on this list. As a bank, it has a strong focus on providing highly-personalized, multilingual service to a diverse customer base.

The bank’s founders are Chinese Canadians, and they tailored the bank to provide specialized service to those with a similar background.

WealthONE is offering a great interest rate on all TFSA savings, which makes them another solid choice if you’re looking for a higher return on your saved cash.

There are no monthly banking fees, and there isn’t a minimum balance that you’ll need to maintain.

5. MAXA Financial TFSA

maxa financial logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

MAXA Financial offers high-interest TFSAs and allows account holders to purchase GICs as well. With a traditional TFSA savings account, you can earn an excellent interest rate, no matter how small your savings balance is.

If you choose to invest in GICs with your TFSA savings, you can earn high rates for one-year terms.

MAXA Financial is open about the fact that their interest rates are variable, which means they’re subject to change at any time. This could either work in your favour or against. 

However, MAXA does offer a 21-day rate guarantee, which will keep you locked into your introductory interest rate for at least three weeks.

6. Hubert Financial “Happy Savings” TFSA

Hubert Financial Logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

Hubert Financial’s “Happy Savings” high-interest TFSA features a simple, easy-to-navigate online banking platform and offers a hefty interest rate on your savings account balance, which is paid on a monthly basis.

All of your savings are 100% guaranteed by the DGCM, there are no minimum balance requirements, and no monthly bank fees to worry about.

7. Motive Financial High-Interest TFSA

Motive Financial Logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

Motive Financial is currently offering one of the best rates in the country. That being said, this rate could change at any time.

It’s likely that this is an introductory rate designed to bring in new customers with the promise of high monthly interest payments.

Besides traditional TFSA savings, Motive Financial also provides a TFSA GIC, which offers competitive rates with one-year, seven-year, or ten-year terms.

8. Tangerine TFSA

Tangerine logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

Tangerine, by far, has one of the best introductory TFSA savings rates in Canada. Currently, the company is offering a limited-time promo rate for new members. After this, though, you’ll be dropped to a much lower fixed-interest rate.

Although the lower rate may not be the best deal for the long-term, the high upfront interest rate might make up for it.

You can always transfer your TFSA savings to another high-interest account after maximizing your TFSA contributions and taking advantage of Tangerine’s introductory rate.

9. People’s Group TFSA

Peoples Trust eSavings Logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

Peoples Group (the operating name for Peoples Trust, which it formerly went by) offers high-interest savings accounts, high-interest TFSA savings, and TFSA GIC accounts.

Currently, the company offers a great interest rate on all savings, but this changes periodically, so be sure to double-check their daily rates before you sign up.

The TFSA GICs contracts range from one-year terms up to five-year terms.

10. Alterna Bank TFSA eSavings Account

Alterna Banking Logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

In 2020, Alterna Bank’s TFSA savings account was ranked as the best in Canada by several sources, due to its competitive interest rates and reliability. Currently, they’re offering a good savings rate on their TFSA eSavings account.

Although Alterna Bank has great reliability ratings, their interest rate isn’t the highest that I’ve seen. Alterna Bank also doesn’t offer TFSA GICs, which doesn’t provide you with the opportunity to earn more on long-term savings.

Still, it’s a better interest rate than most mainstream banks offer, so it’s worth looking into.

11. Canadian Tire TFSA

Canadian Tire Logo
  • Monthly Fees: None
  • Minimum Balance Required: No minimum

Canadian Tire offers high-interest TFSA savings account with a recently-increased savings rate. There’s just one problem – Canadian Tire Bank doesn’t offer services to residents of Quebec at this time, which may be a deal-breaker for some.

In addition to their HISA and TFSA savings accounts, Canadian Tire Bank also offers TFSA GIC accounts with a minimum $1,000 investment. Terms range from a one-year term to a five-year term.

Compared to other GIC TFSAs, though, Canadian Tire Bank’s GIC rates are a bit low.

Using a TFSA as an Investment Account

A HISA/TFSA savings account is a great way to reliably save money. However, as an investor, TFSA accounts really appeal to me. With a TFSA account, you can put your savings to use by investing in:

  • Stocks
  • ETFs
  • Mutual funds
  • Fixed-income investments (i.e., government bonds)

Unlike a traditional investment account, which requires you to pay taxes on your capital gains, the profits you earn through your TFSA account are not taxable.

The catch is that you’ll never be able to grow a TFSA account as large as a traditional investment account, due to the annual contribution limits imposed by the CRA. Either way, TFSAs are an incredible investment vehicle.

TFSA Mistakes to Avoid

Here are some common TFSA mistakes to avoid:

The Best TFSA Robo-Advisor Accounts

The high-interest TFSA savings accounts and TFSA GIC accounts that I mentioned above are a good choice for those who want to see their investments grow at a steady (if somewhat slow) rate.

If you’re willing to take on a bit more long-term risk, though, a TFSA robo-advisor account could offer you more rewards.

These TFSA accounts allow you to invest in stocks, ETFs, and mutual funds using a tax-free savings account. Investing in the stock market comes with risks, but it also offers more opportunity for reward, which is appealing to investors like myself.

TFSA robo-investment platforms do the hard work and market research for you, automatically adjusting your portfolio. All you’ll need to do is set your desired risk-reward level, invest into your TFSA account, and the rest will be handled for you.

Here are some of the best TFSA robo-advisor accounts available to Canadians.

Wealthsimple TFSA

Wealthsimple is an automated investment platform that offers standard robo-investment accounts and tax-free investment accounts. The platform allows you to set your risk levels and personalize your investment portfolio, so that you can maximize your TFSA investments.

You can create a TFSA investment account on Wealthsimple with as little as $1. So, as long as you’re at least 18 and a Canadian resident with a valid SIN, you’re eligible.

Wealthsimple also has a handy built-in calculator to help you track your TFSA contribution so that you don’t get penalized for over-contributing to your account.

The best part of Wealthsimple’s robo-investment platform is that they allow you to withdraw your funds at any time, without added penalties or fees.

Questwealth TFSA by Questrade

Questwealth is Questrade’s premier automated investment platform. They have a low account management fee of just 0.25% for accounts investing less than $100,000 (which is all TFSA accounts at this time).

Your investment portfolio is automatically adjusted in real-time, and you can select portfolio categories, allowing you to invest in markets and businesses that you believe in.

Pros & Cons of TFSAs

If you’re thinking of opening up a TFSA, you’re likely wondering if there are any cons to them. While there aren’t any major downsides, TFSA accounts do have some limitations that are worth noting.

Here’s a quick table of the pros and cons associated with TFSAs:

TFSA ProsTFSA Cons
Interest earned on TFSA accounts does not count towards your annual income.The money you deposit into your TFSA account is not tax-deductible (unlike an RRSP contribution, which is deducted from your annual tax liability).
Capital gains earned on investments do not count towards your annual income.Capital losses in an TFSA investment account are not tax-deductible like non-TFSA investment accounts.
You can use your TFSA for cash savings, stocks, ETFs, mutual funds, and bonds.There are annual and lifetime contribution limits for TFSA accounts, unlike traditional HISA or investment accounts.
You can withdraw money from your TFSA at any time, unless it’s invested in a long-term GIC contract.Contributions you make to a TFSA account cannot be matched by your employer or government institution, unlike a RESP or RRSP account.
TFSAs are available to all Canadians with a Social Insurance Number who are at least 18.Contribution limits do not vary based on income. Everybody is capped at the same limit, which means that your TFSA can only grow up to a certain amount.

Personally, I recommend that every Canadian citizen opens up a TFSA account. The benefits far outweigh the drawbacks, and they’re an excellent way to grow your savings and earn additional tax-free passive income on interest and investments.

TFSA Contribution Room (2009 – 2022)

The TFSA program started in 2009 with a maximum annual contribution of $5,000. Every year since then, the maximum annual contribution room has been increased by increments of $5,000 or more.

With each passing year, the maximum lifetime contribution amount increases. You’re able to make “back contributions” for every year back that you were at least 18 years old and eligible for the program.

Here’s a full list of the current TFSA contribution room from 2009 to the present (2022):

YearTFSA Contribution Room
2009$5,000
2010$5,000
2011$5,000
2012$5,000
2013$5,500
2014$5,500
2015$10,000
2016$5,500
2017$5,500
2018$5,500
2019$6,000
2020$6,000
2021$6,000
2022$6,000
Total Lifetime Contribution Limit:$81,500

For example, if you were at least 18 by 2009, then you would be able to contribute the current maximum lifetime contribution of up to $81,500 into a TFSA account. You can also spread the amount across multiple TFSA accounts.

However, if you didn’t turn 18 until several years later, then your maximum lifetime contribution would start out at a lower amount.

How Do TFSA Withdrawals Work?

The money that you put into a TFSA account can be withdrawn at any time. Since it’s a tax-free account, and you’ve already paid income tax on the funds, you don’t have to pay any extra taxes for withdrawing the money from your TFSA.

FAQs About TFSAs

What Is The Maximum Amount I Can Contribute To My TFSA 2022?

In 2022, the annual contribution amount was increased by another $6,000. This brings the maximum lifetime contribution amount up to $81,500 for those who were at least 18 when the program was started in 2009.

Do Capital Gains Count Towards My TFSA Contribution?

Capital gains earned from TFSA investment accounts do not count towards your TFSA contribution. Also, capital gains on TFSA investment accounts are not taxable.

Are Capital Losses In A TFSA Account Tax-Deductible?

They are not. Capital losses on non-TFSA investment accounts are tax deductible on your income taxes. This is not the case with TFSA investment accounts, though. Since it’s a tax-free investment savings account, capital losses are not eligible for tax deductions.

What Happens If I’ve Over-Contributed To My TFSA?

Saving is always a good thing, but be careful not to over-contribute to your TFSA! The CRA keeps a close eye on TFSA accounts and imposes a 1% charge on any amount over your maximum lifetime contribution amount on a monthly basis.

For instance, if your maximum lifetime contribution limit is $81,500 and your contribution reaches $82,500, then you’ll be charged a $10 fee per month on the $1,000 overage.

Can I Have Multiple TFSAs?

Yes you can. However, your maximum lifetime contribution amount still remains the same. You can split your maximum TFSA contribution amount across multiple TFSA accounts, but you can’t put your max in each account separately.

For instance, some individuals may put half of their TFSA contribution limit into a high-interest savings account and allocate the other half of their total allowed TFSA contributions into a TFSA used for investing.

Can I Transfer My TFSA To Another Bank?

Yes, you can. This is often helpful if your current bank is offering a low savings rate and you want to switch over to a bank that’s offering a higher TFSA interest rate. To ensure a smooth transition, you’ll want to have the bank transfer the funds, as opposed to you withdrawing it and then re-depositing it into another account.

That being said, many financial institutions impose surcharges for transferring large sums of money, so you may have to pay $100+ to transfer your TFSA savings to another account.

Can I Add TFSA Withdrawals Back To My TFSA Account In The Same Year?

Yes, you can. Just make sure that you don’t go over your maximum TFSA dollar limit for that year. If you’re close to reaching your limit, I advise waiting until the next year when the TFSA contribution room increases to avoid the CRA’s 1% over-contribution fee.

Do TFSA Withdrawals Count As Income?

No, they don’t. One of the best features of a TFSA account is that your withdrawals are not taxable. This applies to interest earned in TFSA savings accounts as well as capital gains from TFSA investment accounts.

Conclusion

Best TFSA Rates In Canada

Canada’s TFSA program provides a great incentive for Canadians to save more money. With high-interest TFSA savings accounts, you can put your savings to work for you and withdraw your profits tax-free.

The trick is to find the banks offering the best TFSA rates in Canada. If you want to make the most of the TFSA program, investing in the stock market is a great vehicle.

To learn more, check out my guide to investing for beginners next!

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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