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If you are considering opening a tax-free savings account and are not sure which bank will offer you good interest, stay here. Read this article and find out the TFSA interest rate: Highest interest rate on TFSAs from TD, RBC, CIBC, BMO and Scotiabank in 2024?
TFSA interest rate
TFSAs are savings accounts that grow tax-free and can be used to store various investments. The best high-interest tax-free savings accounts (TFSAs) offer high interest rates and low expenses.
One form of registered plan that earns tax-free interest is the Tax-Free Savings Account (TFSA). Offering tax-sheltered benefits, high-interest TFSAs work the same way as regular savings accounts.
In this article, we are going to have a detailed discussion on the TFSA interest rate, how it works and the interest rates offered by some major banks.
What is a TFSA?
In 2009, Canadians had access to Tax-Free Savings Accounts, or TFSAs, for the first time. Savings accounts aren’t the only thing tax-free savings accounts are used for. It makes sense: it allows you to grow your money even faster than a regular savings account or a high-interest savings account that doesn’t qualify for a TFSA.
While TFSAs can house a variety of investments, they can also be used as a simple savings account to hold cash. TFSAs can help individuals grow their wealth in the medium and long term by allowing them to benefit from tax-free compound interest. They play a role in a person’s entire portfolio.
The Federal Income Tax Act specifies the guidelines for the operation of TFSAs, and the Canada Revenue Agency (CRA) is responsible for the application and management of these guidelines.
Overview of TFSA interest rates
| Article header | TFSA interest rate |
| Country | Canada |
| Availability | In various banks |
| Interest | Varies by bank |
| The minimum balance | Generally unspecified |
| Costs | Usually free |
| For a detailed discussion | Click here |
Highest interest rate in 2024
Compared to other types of tax-free savings accounts or standard savings accounts, a high interest TFSA offers a higher interest rate.
TFSA interest rates from some of Canada’s major mainstream banks are presented in this section. You can use this data to find out which bank will offer you the highest interest rates in 2024.
| Name of the bank | TFSA rates for 2024 |
| T.D. | 2.5% to 3.6% |
| RBC | 3.3% to 4.5% |
| CIBC | 0.9% to 4.5% |
| BMO | 1% to 2.5% |
| Scotiabank | 0.8% to 3.6% |
The interest rate you earn will be determined by the banking institution where your TFSA is held. Online-only banks generally have higher rates than traditional banks and credit unions.
How to open a TFSA?
A tax-free savings account can be opened by anyone residing in Canada who is at least eighteen years old and has a valid SIN. Any non-resident of Canada who is at least eighteen years old and has a valid SIN can also apply for a TFSA.
Banks, insurance companies, credit unions, trust companies, brokerages and robo-advisors are among the companies that provide access to TFSAs. Creating one is similar to creating any other bank account if you meet the requirements.
On the other hand, contributions made as a non-resident will be subject to a 1% tax for each month that the money remains in the account. You must contact your financial institution, credit union or insurer to open a TFSA. The issuer will need your SIN and date of birth to register your qualifying TFSA arrangement.
FAQs
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