Best Tax-Free Savings Account Rates in Canada for 2025
Jan 15, 2025The best high-interest tax-free savings accounts (TFSAs) have minimal fees and earn high rates of interest.
ALSO CONSIDER: Best high-interest savings accounts | Best high-interest registered retirement savings plans (RRSPs) | Best savings accounts | Best online savings accounts
Tax-free savings accounts (TFSAs) are a type of registered plan that earns tax-free interest. High-interest TFSAs act like regular savings accounts but with tax-sheltered benefits.
- Summary of our picks for the best high-interest TFSAs
Manulife Bank Tax-Free Advantage Account
Tangerine Tax-Free Savings Account
WealthONE Tax-Free Savings Account
Saven Financial TFSA
Canadian Tire Tax Free® High Interest Savings Account
Motive Financial TFSA Savings Account
Achieva Financial TFSA Savings Account
Steinbach Credit Union TFSA Variable Savings
The best TFSA rates in Canada
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Product detailsMore high-interest TFSA rates in Canada
Savings Account | Interest Rate | Monthly Fee | Insurance |
|---|---|---|---|
Achieva Financial TFSA Daily Interest Savings Account | 2.50% | $0 | Deposit Guarantee Corporation of Manitoba |
Alterna Bank TFSA HISA | 1.45% | $0 | CDIC |
ATB Financial Tax-Free Saver Account (Alberta residents only) | 0.50% | $0 | Guaranteed under the ATB Financial Act |
Canadian Tire Tax Free High Interest Savings® Account** | 3.00% | $0 | CDIC |
Canadian Western Bank WestEarner® TFSA Account | 0.55% | $0 | CDIC |
CIBC TFSA Tax Advantage Savings Account® | 5.00%* | $0 | CDIC |
EQ Bank TFSA Savings Account** | 2.00% | $0 | CDIC |
Hubert Financial Happy TFSA HISA** | 1.90% | $0 | Deposit Guarantee Corporation of Manitoba |
ICICI Bank TFSA Savings Account | 1.25% | $0 | CDIC |
Island Savings TFSA HISA (British Columbia only) | 4.64%* | $0 | CDIC |
Manulife Bank Tax-Free Advantage Account | 4.80%* | $0 | CDIC |
MAXA Financial TFSA High Interest Savings Account | 2.20% | $0 | Deposit Guarantee Corporation of Manitoba |
Meridian Credit Union TFSA HISA | 1.05% | $0 | Financial Services Regulatory Authority of Ontario |
Motive TFSA Savings Account** | 2.75% | $0 | CDIC |
Motusbank TFSA High interest savings account | 1.05% | $0 | CDIC |
National Bank of Canada Cash Advantage Solution TFSA | 0.60% - 3.25% | $0 | CDIC |
Outlook Financial TFSA High-Interest Savings Account | 2.20% | $0 | Deposit Guarantee Corporation of Manitoba |
Peoples Trust Tax-Free Savings | 2.25% | $0 | CDIC |
Saven Financial TFSA HISA | 3.15% | $0 | Financial Services Regulatory Authority of Ontario |
Steinbach Credit Union TFSA Variable Savings | 3.50% | $0 | Deposit Guarantee Corporation of Manitoba |
Tangerine Tax-Free Savings Account | up to 4.50%* | $0 | CDIC |
WealthONE Tax-Free Savings Account | 3.20% | $0 | CDIC |
FirstOntario Credit Union TFSA Investment Savings (Ontario only) | 1.10% | $0 | Financial Services Regulatory Authority of Ontario |
(Not available to Quebec residents.)
*Promotional rates offered by the bank. Conditions apply.
Methodology
BACK TO TOPNerdWallet Canada selects the best high-interest tax-free savings accounts based on several criteria. Factors in our evaluation methodology include annual percentage yields, minimum balances, fees, digital experience, access to other TFSA investment products, and more. Only TFSAs from financial institutions available in more than one province are considered for this list.
Things to know about Tax-Free Savings Accounts
What is a Tax-Free Savings Account?
The tax-free savings account, or TFSA, was introduced to Canadians in 2009. With this type of account, you are not required to pay taxes on the interest it earns. This is obviously appealing since it’s a way to grow your money even faster than a traditional savings account or non-TFSA high-interest savings account.
» Make sure you understand the basics: How interest rates work in Canada
How to open a TFSA
Banks, insurance companies, investment firms, credit unions, trust companies, discount brokerages and robo-advisors all provide access to TFSAs. Opening one is similar to opening any bank account, as long as you are eligible.
» MORE: Read our full review of Scotiabank TFSA
TFSA eligibility
To be eligible for a TFSA, you need to meet all the following criteria:
Be a resident of Canada (or qualifying non-resident).
Have a valid Social Insurance Number (SIN).
Be at least 18 years or older.
Both residents and non-residents of Canada can open a TFSA so long as they meet the other eligibility requirements. However, non-residents may be subject to a 1% tax on some contributions.
In most provinces and territories, you must wait until the date of your 18th birthday to open a TFSA. However, once you turn 18, you get the total contribution limit amount for that year. For example, let’s say you turned 18 on July 7, 2024. You’d be able to open a TFSA on that day and contribute up to $7,000 since that’s the TFSA contribution limit for 2024.
However, in some provinces, you can’t open a TFSA until you are 19, even though you start accumulating contribution room at age 18. If you reside in British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Northwest Territories, Nunavut, or Yukon, the age of eligibility for a TFSA is 19. In this case, you’d get the contribution room for the year you turn 19 and the previous year.
So, let’s say you live in Vancouver and turn 19 on September 9, 2023. On your birthday, you’d have access to a total of $13,500 in TFSA contribution room since the limit for 2023 and 2024 was $6,500 and $7,000, respectively.
TFSA contribution room and withdrawals
Before opening your TFSA, it’s important to be familiar with the rules.
TFSA contribution room
There’s an annual dollar limit on how much you can contribute to a TFSA each year. Here are the TFSA contribution limits since 2009:
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
2023 – $6,500
2024 – $7,000
2025 – $7,000
Your “contribution room” is the total combined annual contribution limits of all the years you’ve been eligible for a TFSA. Even if you haven’t been investing in a TFSA, you’ve been accumulating contribution room since 2009 for every year that you’ve been at least 18 years old, have had a SIN and have been a Canadian resident.
If you turned 18 in 2013, for example, your lifetime TFSA contribution limit as of 2025 would be $82,000.
Since your investments can grow within your TFSA, having a book value that exceeds the contribution limit is possible. Additionally, since you can recontribute any withdrawals the following year, it’s possible to have a TFSA limit that exceeds what you have been allotted.
For example, let’s say you’ve maxed out your TFSA and you’ve made a capital gain of $20,000. You decide to withdraw that money. Come the new year, you can recontribute that $20,000, plus the additional contribution limit. By doing this, you’ve essentially created an additional $20,000 in contribution room.
Where can I find my TFSA contribution room?
You can find out where your TFSA contribution room stands by logging into your “My Account for Individuals” on the CRA website. Alternatively, you can contact the CRA directly and ask an authorized representative about your contribution room.
While this is a quick way to check your TFSA contribution room, it’s not always accurate. Financial institutions typically only report your contributions once a year. That means if you’ve made any additional contributions or withdrawals, the CRA likely won’t have the most up-to-date information.
The best thing to do is to keep your own records of your TFSA transactions. By doing this, it’s unlikely that you’ll ever go over your limit.
TFSA withdrawals
Most types of TFSA accounts allow you to withdraw money at any time. That said, some products within your TFSA, such as registered guaranteed investment certificates (GICs), may be locked in, so you may need to wait a certain length of time before you can withdraw them.
Withdrawing funds from a TFSA doesn’t affect your total contribution limit. However, if you plan on replacing the amount you’ve withdrawn, you need to be mindful of your contribution limits.
Any withdrawals you make in a calendar year can be replaced the following year. However, you can’t withdraw and replace funds in the same year unless you have the contribution room available.
» MORE: How to hold a GIC in a TFSA
How to use a TFSA
There are many different ways to use a TFSA. When deciding the best TFSA for your needs, first consider how you’ll use the account. Some people will use their TFSA for short-term savings, such as a home down payment, while others will use it for long-term goals, including investing for retirement.
» DISCOVER: 8 easy ways to start saving money
Types of TFSAs
The type of TFSA you set up depends on your goals. But here’s a brief overview of types of TFSAs and what you can do with them.
High-interest TFSA. This type of TFSA acts like a regular high-interest savings account but with tax-exemption benefits. Since you can access your funds quickly, it’s ideal for short-term savings or an emergency fund.
TFSA term deposits. You can lock away money for a specified period of time using a tax-free guaranteed investment certificate (GIC) or term deposit. These can be either redeemable, meaning you can cash out early, or non-redeemable. Non-redeemable GICs can offer higher rates of interest than redeemable GICs and high-interest TFSAs, but you won’t have immediate access to your money with this option.
TFSA investment account. This type of TFSA account allows you to invest TFSA funds. It may be managed by your financial institution or investment firm, including robo-advisors, or it can be self-directed, meaning you manage it on your own.
» See our picks: The best high-interest savings accounts in Canada
Investing your TFSA
A TFSA is pretty straightforward. You contribute any amount up to the current limit and your contributions grow tax-free. What often confuses people about TFSAs is the name. Even though it’s called a tax-free savings account, it can be used as an investment account.
Investment products can be purchased within the account, including:
Because of all the different ways you can use a TFSA, you may choose to open more than one. Just remember that your total amount of available contribution room does not change, and you can’t exceed that limit regardless of how many accounts you have. So, you’ll have to monitor the balances of all your accounts.
Times you may pay taxes on your TFSA
In most cases, any gains made within your TFSA are tax-exempt, but there are some scenarios where taxes may apply.
If you exceed your available contribution room, you’ll have to pay a tax of 1% on the excess contribution every month until you get your account back below your limit.
If you become a non-resident. Now let’s say you have a TFSA and decide to move overseas and become a non-resident for tax purposes. You would no longer gain any new contribution room, so you’d be taxed 1% on any extra deposits if you exceed your total limit.
If you use your TFSA for business purposes. Your TFSA is meant for personal use only and can’t be used for business purposes. For example, let’s say you decide to day trade in your TFSA. The CRA may consider this business use and tax all of your capital gains at your marginal tax rate. It doesn’t matter if you’re not a professional day trader. If the CRA considers it business use, they’ll tax you accordingly.
Frequently asked questions
What’s the difference between a TFSA and RRSP?
What’s the difference between a TFSA and RRSP?
When you contribute to your Registered Retirement Savings Plan, or RRSP, your taxable income is reduced by the same amount for the year. However, when you eventually withdraw that money, it will be taxed at your marginal tax rate.
With TFSAs, you don’t get a tax break on contributions, but all gains made are entirely tax free.
With RRSPs, you gain contribution room based on your previous year’s income, while TFSA contribution room is a fixed amount that gets set by the government each year.
What is a high-interest TFSA?
What is a high-interest TFSA?
A high-interest TFSA is a tax-free savings account that pays a higher rate of interest than traditional savings accounts or other types of TFSAs. How much interest you’ll get depends on the financial institution where you have your TFSA. Online-only banks tend to offer higher rates than traditional banks and credit unions, for example.
The term "high-interest" is a bit relative since rates fluctuate over time, and Canada has had record low interest rates in recent years. Still, the interest rate offered is a fairly simple way to compare TFSAs when searching for the best account for your needs.
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Siddhi Bagwe
Siddhi Bagwe
