Best TFSA savings accounts

Launched by Home Trust in 2013, Oaken Financial offers TFSAs in the form of registered GICs. Interest rates range from 4.15% to 5.05%, depending on the term length selected, and require a $1K minimum deposit. In addition to no fees for GICs with Oaken, no fee is charged for transferring the TFSA to another institution.

A TFSA with Oaken is a great option for those who are risk averse, as it offers a guaranteed return at a rate around or above inflation, and accountholders won’t be penalized if another bank eventually offers a more attractive TFSA deal and it’s preferable to switch.

◦ Interest rates: 4.15%-5.05%

◦ Term lengths: 1 year-5 years

◦ Minimum deposit: $1,000

◦ Fees: No fees for GICs

◦ Eligible for CDIC insurance

◦ Open an account online or at branches in Toronto, Vancouver, Calgary and Halifax.

EQ Bank is an online bank launched by Equitable Bank in 2016, offering Canadians a no-frills online-only savings account and GIC experience. Recently, EQ Bank has expanded its offerings to include TFSA Savings Accounts to those with an existing EQ Bank Savings Plus Account. The interest rate on this account is 3.00%*, which is the regular interest rate, not a promotional rate.

In keeping with most other online banks, there are no branches for you to visit, and the process of opening and maintaining your account is done entirely online. Since EQ Bank has no physical branches, you’ll also pay no monthly fees on your account. You can open as many regular high-interest savings accounts as you like and a maximum of one TFSA Savings Account per person. To transfer funds to an EQ Bank TFSA Savings Account, you can link your regular chequing account, make one-time transfers or set up an automatic transfer. You can also use Interac e-Transfers® to fund your account.

A TFSA Savings Account with EQ Bank is an excellent option for those looking to earn the maximum possible tax-free interest but want their assets liquid enough to access at a moment’s notice.

◦ Interest rate: 3.00%*

◦ Minimum deposit: None

◦ Fees: None

◦ Eligible for CDIC Insurance

◦ Open an account online

◦ * Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.

Motive Financial is an online-only bank, and its low operating costs allow it to pass on high interest rates to its customers. It’s particularly attractive for those who want the flexibility of holding cash in their TFSA, as its interest rate is among the highest in Canada for this account type, and there are no fees for making withdrawals.

Though Motive Financial is owned by Edmonton-based Canadian Western Bank, its accountholders cannot be serviced at Canadian Western Bank branches; all customer service is conducted via email or phone correspondence only.

◦ Interest rates: See Motive Financial

◦ Minimum deposit: None for a regular TFSA; $1000 for a GIC held in a TFSA

◦ Fees: $50 for closing a TFSA within one year of opening, or for transferring a TFSA to another bank at any time.

◦ Eligible for CDIC coverage

◦ Not available to Quebec residents

BMO’s TFSA interest rate is a comparatively low 0.05%, but those who are more comfortable working with a major bank might be willing to overlook that. BMO offers both TFSAs for basic cash deposits and for holding investments.

BMO does not charge for withdrawing from its TFSA, but it does charge a $50 fee for transferring the TFSA to another organization.

◦ Regular interest rate: 0.05%

◦ Minimum deposit: $50

◦ Fees: $50 for transferring to another institution

◦ Open an investment TFSA account online or at one of 900+ BMO branches throughout Canada; basic (cash) TFSAs can only be opened online.

Though TFSA contributions are limited, there’s no limit to how much those contributions can appreciate in value over time. And while the above accounts offer the reassurance of a guaranteed interest rate, those who are willing to park investments in their TFSA might ultimately experience far greater gains.

Enter Wealthsimple, which allows you to select a prebuilt investment portfolio, the contents of which are periodically rebalanced by Wealthsimple as the market changes. Portfolios are designed to match different levels of risk tolerance, consisting of a mix of equity and fixed-income (bond) ETFs. Because your investment portfolio is parked in a TFSA, all the capital gains and dividends earned are untaxed.

Security values can rise or fall, but over time a balanced investment portfolio’s collective value generally will increase at a greater pace than the 1-3% interest rates offered by standard TFSAs. Consider a robo-advisor TFSA like Wealthsimple if: You don’t anticipate having to withdraw your TFSA funds for at least 10 years; you have the patience and levelheadedness to ride out temporary market dips; you prefer to invest with prebuilt, automated portfolios rather than making your own individual trades (see Questrade below).

◦ Management fees: 0.5% on accounts holding $0-$100K; 0.4% on accounts holding $100K+

◦ Management expense ratio fees (MERs): 0.2%-0.4% depending on the portfolio

◦ Welcome offer: $75 bonus for opening and funding your first Wealthsimple account (minimum $500 deposit)

◦ Special feature: Free TFSA tracker tool to help keep your TFSA contributions within the legal limit

◦ Funds are insured up to $1M by the Canadian Investor Protection Fund (CIPF) in the event that Wealthsimple goes bankrupt

If you already have some investing experience and you’re comfortable buying and selling your own securities, you can minimize fees by using an online broker like Questrade to hold your choice of stocks, ETFs, mutual funds, bonds, and a number of other investments within your TFSA.

ETFs are free to buy with Questrade; all other trades are charged fees between $4.95 to $9.95 depending on the number of shares bought or sold. These per-trade fees typically erode your account gains less than the management fees charged by robo-advisors. Also, you can hold both CA$ and USD in your Questrade account, which helps bypass currency conversion fees when you want to trade a US stock or ETF.

Account minimum: $1,000

Trade fees: Usually $4.95-$9.95

Welcome offer: Start Investing with Questrade via our exclusive link and get $50 in Free Trades (when you fund your account with $1,000)!

Special feature: Get up to $150 worth of transfer fees waived when you move your TFSA to Questrade

Funds are insured up to $10M by the Canadian Investor Protection Fund (CIPF) in the event that Questrade goes bankrupt