Highest Paying Best TFSA Accounts in Canada 2021

Below is the list for the returning readers tracking the Highest Paying TFSA Accounts in Canada. If you are new, please read the post once to get a better understanding of the table and Tax-Free Savings Account (TFSA) in Canada.

You can also reference Best High Interest Savings Accounts (HISA) Rate Chart

Updated: Nov 05, 2021

FI NameTFSA RateQC EligibleCoverage1 Year Return
Wealth One Bank of Canada1.50% No CDIC $10,151.04
Canadian Tire Bank1.25% No CDIC$10,125.72
EQ Bank1.25% No CDIC$10,125.72
Implicity Financial1.10%YesDGCM$10.110.56
Motive Financial1.10% No CDIC$10.110.56
AcceleRate Financial1.10%YesDGCM$10.110.56
Achieva Financial1.10%YesDGCM$10.110.56
Peoples Trust1.10%Yes CDIC$10.110.56
motusbank1.10%Yes CDIC$10.110.56
Outlook Financial1.10%YesDGCM $10.110.56
Hubert Financial1.10% NoDGCM$10.110.56
Ideal Savings1.01% NoDGCM $10,101.47
MAXA Financial1.00%YesDGCM $10,100.46
Alterna Bank0.90%Yes CDIC$10,090.37
Tangerine Bank0.10%YesCDIC $10,010.00
TD Bank0.05%YesCDIC $10,005.00
Best TFSA Accounts in Canada

My Plan for the Best TFSA Accounts Rates Chart

I recently started posting a complete chart for Best High Interest Savings Account (HISA) in Canada and noticed HISA and TFSA rates aren’t always the same. In addition, some financial institutions from the HISA list don’t offer TFSA. Hence, I decided to have a 2nd chart for the highest paying Tax-Free Savings Accounts (TFSA) showing their current rates and coverage.

Why Choosing a HISA Type Account for TFSA

TFSA is awesome because the money is already taxed and any return won’t be taxed again. HISA TFSA (or Cash TFSA) will serve those who don’t want to risk their money in the market and seek alternative safe options for their investments.

It can also be used for a balanced portfolio to offset the risk of other investments. You can also put your emergency fund in HISA TFSA for a quick access. If you are one of these individuals, choose one of the banks listed on this chart for your TFSA account.

It’s worth mentioning that there is no limit to the number of TFSA accounts an individual can have. Therefore, you can have as many TFSA accounts as you would like to. You can have Trading or Managed Robo account with WealthSimple or Questrade in addition to the HISA TFSA account. However, please pay attention to the transfer-out fees.

Explaining Tax-Free Savings Account (TFSA)

Tax-Free Savings Account (TFSA) concept is really amazing. Don’t pay any tax on all the earned income in the TFSA account. This means, if your $5,000 in TFSA becomes $50,000, all the extra $45,000 is yours and only yours. Canada Revenue Agency (CRA) won’t take any tax from your TFSA earnings.

Canada’s TFSA is similar to the United States’ Roth IRAs. These retirement-focused accounts are funded with already taxed money and grow tax-free. Withdrawals are not counted as income hence and not taxed.

You can hold many types of investments in a TFSA including Cash, GICs, ETFs, Mutual Funds, Stocks, and Bonds.

Most Important TFSA Rules

  • Amount of yearly contribution is limited. 2021’s limit is $6000. However, if you have been a Canadian resident since its introduction in 2009, you have a total $75,500 contribution room.
  • Any unused contribution can be used in the following years.
  • You can withdraw your TFSA by the end of each year and recontribute in the following year(s). However, that withdrawal fund room won’t be available during the withdrawal year. For example, if you already contributed $75,500 and you decide to withdraw $5,500 in 2021, you will have to wait until 2022 to recontribute the $5,500 plus whatever contribution limit the government sets for 2022.
  • Loses in TFSA are not considered a withdrawal. Therefore, they are not part of your TFSA contribution room. This means any lost amount, can be recontributed.
  • Foreign funds (USD, EUR) will be converted to CAD and reported to CRA. The total CAD amount should be within the contribution room.
  • Government benefits will not be impacted by withdrawing from TFSA. This means, if you have a good TFSA by the time you retire or lose your job and have a stream of dividend income from TFSA, the government doesn’t see it as income and your Old Age Security (OAS), Guaranteed Income Supplement (GIS), or Employment Insurance (EI) will not be impacted at all.
  • TFSA income also won’t affect other benefits like Canada Child Benefit (CCB), Canada Workers Benefit (CWB), and GST/HST credit.
  • Transferring between TFSA accounts won’t be seen as withdrawal or contributions. Hence, you can transfer with no limitation but watch out for transfer-out fees.
  • If, at any time in a month, you have an excess TFSA amount, you are liable to a tax of 1% on your highest excess TFSA amount in that month. For example, if you have a $1000 extra contribution in August which you keep, CRA will ask you to pay them $1000 * 1% * 5 = $50 in tax. 5 is for the 5 months of Aug, Sept, Oct, Nov, and Dec. There are some more great examples in CRA website.
  • Transfers between RRSP and TFSA are considered withdrawals from one and contributions to the other.

Where to Find Your TFSA Contribution Room?

Your TFSA contribution room information can be found by using one of the following services:

The TFSA Account Criteria to Be Included in This TFSA List

As maintaining such a list isn’t easy and for it to be simple and clear, I will include the top 15-20 highest paying TFSA Savings Accounts. The list will not include promotional offers which can disappear suddenly. It will also not include targeted offers sent to selected clients.

In addition, the accounts need to be accessible to most Canadians (QC is an exception) directly in a branch or online. This means, FIs like Saven Financial won’t be included in this TFSA Chart.

One important fact to consider is to not invest more than the amount covered by CDIC or the Provincial Credit Union Deposit Insurance. This is to make sure you get your money back in case the bank goes bankrupt.

For reference, DGCM is Deposit Guarantee Corporation of Manitoba. DGCM provides an unlimited guarantee of all deposits in a Manitoba credit union including accrued interest to date of payout. This is a much higher coverage than CDIC’s.

Tax-Free Savings Accounts (TFSA) List

I will try to maintain this list whenever I get informed about a rate change. However, I guarantee a monthly update. Please don’t hesitate to report any update in the comment section and I will update immediately.

  • Some financial institutes don’t offer new accounts to QC residents which is mentioned on the list.
  • Every financial institute has either CIDC or DGCM coverage which is pointed out on the list.
  • The 1 year Annual Compound Return is based on an initial $10,000 deposit with a monthly payment.
  • For the sake of comparison, I am including TD and Tangerine (Read my Tangerine Bank Review). This will only be their regular rates without any temporary promotion for a new account or new money.

You can also reference High Interest Savings Accounts (HISA) Chart

Updated: Nov 05, 2021

FI NameTFSA RateQC EligibleCoverage1 Year Return
Wealth One Bank of Canada1.50% No CDIC $10,151.04
Canadian Tire Bank1.25% No CDIC$10,125.72
EQ Bank1.25% No CDIC$10,125.72
Implicity Financial1.10%YesDGCM$10.110.56
Motive Financial1.10% No CDIC$10.110.56
AcceleRate Financial1.10%YesDGCM$10.110.56
Achieva Financial1.10%YesDGCM$10.110.56
Peoples Trust1.10%Yes CDIC$10.110.56
motusbank1.10%Yes CDIC$10.110.56
Outlook Financial1.10%YesDGCM $10.110.56
Hubert Financial1.10% NoDGCM$10.110.56
Ideal Savings1.01% NoDGCM $10,101.47
MAXA Financial1.00%YesDGCM $10,100.46
Alterna Bank0.90%Yes CDIC$10,090.37
Tangerine Bank0.10%YesCDIC $10,010.00
TD Bank0.05%YesCDIC $10,005.00

The difference between the highest and lowest payer is a considerable amount. You can grow your $10K to $10,156.11 or keep it almost as it was at $10,005.00The choice is yours.

Some considerations before opening any TFSA is to know each account’s features such as minimum balance requirements or online banking options. Knowledge of the fees is a must specially the transfer-out fees.

Final Thoughts and Recommendations

What matters to me personally besides the coverage is the ability to transfer funds between my accounts electronically and the transfer fee. I always prefer to have my accounts where I can transfer out for free. Banks’ fees change so please confirm if there is a transfer-out fee.

I personally have opened many accounts prior to my focus on market investments and never had an issue. You can read my updated money reports to know what accounts I currently have.

Depending on how much extra you will earn (Comparing with a lower paying FI with a free transfer-out) and how much money you are investing, the hassle after deducting the transfer-out fee might not worth opening a new account.

As always, thank you for reading. Please leave me your questions or comments below.

2 thoughts on “Highest Paying Best TFSA Accounts in Canada 2021

    1. Yes indeed. It is the Canadian version of Roth. I don’t really have percentage of where people are investing their TFSA. However, I know none of my friends or colleagues trade in the market. 90% never heard of almost all the banks on this list (Except the last 2 TD and Tangerine).

      My assumption is that most Canadians are still losing money in Mutual Funds or big banks’ very low rate accounts.

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