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Tax-Free Savings Accounts Product Comparison

By Krissy Morley • Page 1 of 1

Last Updated: October 24, 2011

Compiled by RedFlagDeals.com Staff

The new year means there are new opportunities for you to get the most out of your money. As of January 2, 2009, the Tax-Free Savings Account introduced by the Government of Canada in the 2008 Budget has been made available. In a nutshell, Canadians will be able to set aside up to $5000 each year in various savings options and not have to pay tax on the income earned or on withdrawals. If you haven't already, you can check out our feature article from 2008 called A Wealth of Choices: Understanding the New Tax-Free Savings Account that will help you understand what the Tax-Free Savings Account is all about and how it can impact your financial planning. You should also have a look at the Government of Canada Tax-Free Savings Account Page.

The next step is figure out which financial institution's Tax-Free Savings Account products are right for you. To get the ball rolling, we've put together a comparison of Tax-Free Savings Accounts, TFSA Investment Accounts, and TFSA GICs. Since the Tax-Free Savings Account is so new, there are some gaps in available information. This comparison has been put together using information found online as well as from phone inquiries. We'll continue to update this article as more offers and information become available. Rates and fees are current as of October 30. If you've spotted an error or know something we don't, send an email to suggest@redflagdeals.com and let us know.

TFSA Savings Account Comparison

Savings Account Transfer Out Fee Interest Rate Minimum Investment/Deposit Check Interest Rate Online Website
BMO none 1.00% $50 Yes Click here
CIBC $100 0.75% $25 Yes Click here
Citizen's Bank $25 0.80% none Yes Click here
CTFS $50 1.50% none Yes Click here
HSBC $25 0.80% none Yes Click here
ICICI Bank Yes 1.40% none Yes Click here
ING Direct none 1.05% none Yes Click here
PCF $50 0.75% none Yes Click here
RBC $50 0.75% $100 Yes Click here
Scotiabank ? 1.50% $25 Yes Click here
TD $50 1.00% none Yes Click here

TFSA Investment Account Comparison

Investment Account Adminstrative Fee Withdrawal Fee Transfer-Out Fee Partial Transfer Fee Swap Fee Cost Per Trade Website Fees Schedule
BMO Investorline $50 (none if your total household assets with BMO Investorline equal $100,000 or more) $25 $135 $50 $45 $9.95 to $29 Click here Click here
eTrade Canada none $50 Certificate Withdrawal, $10 Cheque Withdrawal $125 ? $50 $6.99 to $19.99 Click here Click here
HSBC InvestDirect $50 ? $125 $125 $35 $29.00 and up Click here Click here
Questrade none Free for Electronic Fund Transfers up to $25,000, $10 and up otherwise $125 $25 $25 $4.95 to $9.95 Click here Click here
RBC Direct Investing none none $135 ? $35 $6.95 to $9.95 Click here Click here
TD Waterhouse $50 (none if registered for eServices or your total household assets with TD Waterhouse equal $100,000 or more) $25 $125 $25 per asset, to a maximum of $100 $45 $7.00 and up Click here Click here

TFSA GIC Comparison

GICs 1 Year 2 Year 5 Year More Rates and Information
BMO 0.40% 1.30% 2.10% Click here
CIBC 0.50% 1.40% 2.10% Click here
HSBC 0.20%* None None Click here
ING Direct 1.25%* 2.25%* 3.25%* Click here
ICICI Bank 1.20% 1.70% 3.10% Click here
National Bank of Canada 0.15%* 1.05%* 1.85%* Click here
RBC 0.45% 1.35% 2.00% Click here
TD 0.40% 1.30% 2.10% Click here
Products denoted by a * are cashable

Current Recommendations

As of October 30, 2009, none of the banks are offering an interest rate higher than 1.50% on their TFSA savings accounts. Canadian Tire Financial Services and Scotiabank are presently the only 2 financial service providers with rates of 1.50%.

If you're considering an investment account, Questrade's product stands out with low costs per trade with a maximum of $9.95 and no administrative fees. The offers that we know of from the "Big 5" are currently limited to BMO InvestorLine, RBC Direct Investing, and TD Waterhouse. Both BMO and TD have $50 annual fees unless you have $100,000 in household assets with them. RBC has no annual fee.

Turning to GICs, ING Direct currently appears to have the highest rates at 1.25% for 1 year, 2.25% for 2 years, and 3.25% for 5 years. For redeemable GICs, the best rates right now are also being offered at ING Direct.

While this comparison is a starting point and we've done our best to ensure accuracy, we strongly advise that you conduct your own research before making a decision. If you happen to get new information, drop us a line at suggest@redflagdeals.com so we can update the charts and share the details.

We'd also like to thank angel_wing0 and jiepie for their efforts and the discussions they've initiated in our Personal Finance forum.