Canadian Tire is a major retailer in Canada that offers everything from tires to outdoor equipment and sporting goods.
However, Canadian Tire also operates a banking branch that offers a number of different financial products, including the Canadian Tire TFSA.
These tax-free savings accounts are a great way to stash money away and invest.
Below, I’ll give you my complete Canadian Tire Bank TFSA review. I’ll go over some of the company’s key selling points, answer some common questions, and give you an overview of the pros and cons of this account.
Canadian Tire TFSA: Tax-Free Savings
To incentivize Canadians to save more, the government launched the TFSA program in 2009. This was right in the middle of the global financial crisis.
Many people were completely unprepared and had little to no emergency savings to help them stay on top of their bills.
In short, a TFSA account allows Canadians to save money without having to pay taxes on the amount they have in the account.
While TFSA accounts are limited to a maximum balance, the maximum contribution limit is increased every year, so you can keep on contributing in the future.
The Canadian Tire TFSA account is a great way to start saving money and preparing for the future. It’s a solid choice for any Canadians who want to build a nest egg for retirement or who just want to grow their emergency savings.
Some of the key benefits of the Canadian Tire TFSA account include:
- Tax-free earnings within your TFSA account
- Your contribution room carries over from one year to the next
- Your TFSA balance doesn’t affect your eligibility for government aid programs
- No penalties for making a withdrawal
- There’s no age limit for contributing to a TFSA (unlike RRSP accounts)
What Is Canadian Tire Bank?
Canadian Tire isn’t the only bank that offers a TFSA account. Most major Canadian banks, along with a handful of smaller banks, offer TFSAs to their customers.
All of these accounts are subject to the same TFSA contribution rules, regardless of the financial institution.
However, certain banks offer better interest rates or investment options, so it’s a good idea to weigh your options and research the bank in question before making a decision.
So, what is the Canadian Tire bank?
Canadian Tire Financial Services, doing business as Canadian Tire Bank, was founded in 2003. Canadian Tire, itself, dates back to 1922 and is one of the oldest retail tire suppliers in Canada.
By 2003, though, the company had grown so large that it decided to open up its own bank.
That being said Canadian Tire Bank has developed a reputation of trust and integrity since it first got into the banking business in 2003.
Is Canadian Tire TFSA Safe?
Keeping your savings in a Canadian Tire TFSA account is one of the safest ways to store your money.
Canadian Tire Bank is a trustworthy, regulated bank and is just as good of a choice as opening a TFSA through a larger bank like RBC or TD Bank.
Compared to a traditional investment account, which requires you to pay taxes on your earnings, the money you earn in a TFSA account is 100% tax-free.
It is CDIC insured, meaning your deposits will be protected for up to $100,000 in case of bank insolvency.
Is There An Account Minimum For Canadian Tire TFSA?
Some bank accounts (especially those offered by major banks) require customers to make a minimum deposit to set up the account.
This can be a bit restrictive and limits the number of people who can open up an account with the bank.
Thankfully, the Canadian Tire TFSA doesn’t require customers to make a minimum deposit to open their accounts.
Anybody can open up a TFSA account with Canadian Tire, regardless of their income or how much money they have.
That being said, I recommend depositing as much money as you can, so you can take full advantage of the TFSA’s maximum contribution limit.
Does Canadian Tire TFSA Have Fees?
Traditional banks are often known for charging costly monthly and annual fees.
These fees are typically withdrawn directly from your account and help the bank cover basic operating and account management costs.
The Canadian Tire TFSA does not come with any extra fees. TFSA account holders don’t have to pay a monthly maintenance fee or maintain a minimum balance.
How To Apply For Canadian Tire TFSA
Applying for a Canadian Tire TFSA account is a simple and straightforward process, even if you’re not already a customer.
As long as you’re a Canadian resident who’s at least 18 years old, then you can apply and open your account within the day.
Canadian Tire Bank doesn’t offer any physical ABMs or brick-and-mortar banking locations, so you can’t apply at a branch, as you would at most major banks.
Instead, you’ll have to apply for your Canadian Tire TFSA online or over the phone:
- Apply for Canadian Tire TFSA Online
- Call: 1-866-681-CTFS (2837)
I recommend applying online, as this is the quickest way to get your account set up.
Applying over the phone often comes with a long wait time. Additionally, it’s harder to verify your identity over the phone.
When applying, you’ll usually be asked for a few key details, including:
- A photocopy of your ID
- Your social insurance number (SIN)
- Proof of residency
What Is The Maximum Contribution Limit For Canadian Tire TFSA?
The TFSA program was introduced by the Canadian government in 2009. At that time, it was available to all Canadians who were 18 or older (born before 1991).
The first year, Canadians were given a maximum contribution limit of $5,000. Since then, the contribution limit has increased by at least $5,000 per year.
Currently, the maximum contribution limit for TFSA accounts is $81,500.
If you were born before 1991, then you’ll be allowed to contribute the maximum amount to your TFSA savings account. If you were born after 1991, then you’ll have to do the math back.
For more information on calculating your total allowed contribution limit to the Canadian Tire TFSA, check out my post on how to calculate your TFSA limit.
Are Canadian Tire TFSA Contributions Tax-Deductible?
One of the key benefits of an RRSP retirement account is that all of your contributions are tax-deductible upfront.
The more you contribute to your RRSP now, the less you’ll pay in taxes at the end of the year. You won’t be taxed on the money until it’s withdrawn from your RRSP account after retirement.
TFSA accounts are NOT tax-deductible, though.
You’ll still be required to pay income taxes on the funds, regardless of how much you contribute to your TFSA.
That being said, once the money is in the account, you won’t have to pay any taxes on money earned in the account. You can also withdraw it at any time penalty and tax-free.
How Can A Canadian TFSA Account Be Used?
A TFSA account isn’t just good for saving cash. Your account can also be used to help you earn more money. Here’s how you can use your Canadian Tire TFSA account to put some extra money in your wallet.
Savings
As you might expect, a tax-free savings account can be used just like a traditional savings account.
Canadian Tire TFSAs currently features a 2.40% interest rate, which is very generous and allows your savings to grow passively over time.
If you’re not interested in investing your money into stocks or GICs, then this is a safe bet. Since it’s a TFSA, your interest earnings will not be taxed.
Investing Money
Personally, I think that the Canadian Tire TFSA is best used as an investment vehicle. It’s easy to set up an investment account backed by your TFSA.
As long as you don’t exceed your maximum allowed contribution limit, the money that you earn is 100% tax-free, and you won’t have to pay any capital gains taxes on your earnings.
Alternatively, you can also use the funds in your Canadian Tire TFSA to purchase GIC contracts. This effectively allows you to loan money to the bank for a set period of time.
Your money will be returned with interest, which allows you to earn more than the typical TFSA savings plan.
Currently, Canadian Tire GICs offer 3.55% interest on one-year terms (with a $1,000 investment) and up to 4.95% interest on five-year terms with a $1,000 investment.
Canadian Tire TFSA Review: Is It Right For Me?
Overall, the Canadian Tire TFSA account is one of the best TFSAs I’ve seen. Currently, the bank is offering 2.40% interest on your TFSA balance, which qualifies it as a high-interest savings account.
This is an excellent hedge against inflation and allows your money to work for you 24/7.
Conclusion – Is Canadian Tire TFSA Right For Me?
Opening a Canadian Tire TFSA account is simple and easy. Canadian Tire Bank doesn’t require customers to make a minimum deposit, pay monthly fees, or maintain a minimum balance.
Plus, all your account earnings are 100% tax-free, which is worth taking advantage of.
Interested in saving even more money?
Keep on reading to see my list of the best high-interest savings accounts in Canada next!
