Best TFSA Rates in Canada for Your Savings Goals
Ever stared at your savings account and thought, “You had ONE job—grow my money”? If you’re nodding along, it might be time to give your TFSA the glow-up it deserves.
Truth bomb: While the big banks are busy offering you a measly 0.05% interest on your hard-earned cash, a whole world of significantly better TFSA options exists in Canada. And in 2025’s economic landscape, leaving money in a low-interest TFSA is basically watching your purchasing power slowly evaporate.
Let’s cut through the financial jargon and get straight to what matters: where to find the best TFSA rates in Canada right now, how to choose the right one for your goals, and how to make the most of your contribution room this year.
What’s New with TFSAs in 2025
Before diving into the rates, here’s what you need to know about TFSAs this year:
- The 2025 TFSA contribution limit is $7,000—up from $6,500 in 2023-2024
- The total cumulative contribution room for someone eligible since 2009 is now $102,000
- The annual inflation adjustment mechanism continues to work as designed, rounding to the nearest $500
Remember: Your personal contribution limit might differ based on your age, residency status, and previous contribution history. Always check your specific limit on your CRA My Account before making major moves.
Best TFSA Savings Account Rates (April 2025)
Let’s get to the good stuff. Here are the top TFSA savings rates available right now:
| Institution | Interest Rate | Minimum Balance | Insurance | Notable Features |
|---|---|---|---|---|
| Home Trust | 2.40% | $0 | CDIC | Online-only, no fees |
| Motive Financial | 2.25% | $0 | CDIC | No monthly fees, limited transactions |
| Achieva Financial | 2.10% | $0 | DGCM* | Manitoba credit union, no fees |
| EQ Bank | 1.75% | $0 | CDIC | User-friendly app, unlimited transactions |
| Hubert Financial | 1.65% | $0 | DGCM* | Online division of Sunova Credit Union |
| Tangerine | 0.25% | $0 | CDIC | Occasional promos up to 3.00% |
| Big Five Banks | 0.05-0.10% | Varies | CDIC | Branch access, integrated banking |
*DGCM = Deposit Guarantee Corporation of Manitoba (similar protection to CDIC but provincial)
Why such a huge difference between the top rates and the big banks? It comes down to overhead costs. Online institutions don’t maintain expensive branch networks, allowing them to pass those savings to you through higher interest rates.
TFSA GIC Rates for Fixed Earnings
If you have money you won’t need for a set period and want guaranteed returns, TFSA GICs offer substantially higher rates than savings accounts right now:
| Institution | 1-Year GIC | 3-Year GIC | 5-Year GIC | Minimum Investment |
|---|---|---|---|---|
| EQ Bank | 3.50% | 3.95% | 4.15% | $100 |
| Oaken Financial | 3.40% | 3.80% | 4.10% | $1,000 |
| Motive Financial | 3.35% | 3.75% | 4.00% | $1,000 |
| Wealth One Bank | 3.30% | 3.85% | 4.05% | $1,000 |
| ICICI Bank Canada | 3.25% | 3.70% | 3.95% | $1,000 |
GICs are particularly attractive right now as we’re potentially nearing the end of the current higher interest rate cycle. Locking in these rates could be smart before they start trending downward.
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How to Choose the Right TFSA Type for Your Goals
Not all TFSAs are created equal, and the best one for you depends entirely on your goals. Here’s a quick decision framework:
For Emergency Funds (0-2 Years)
Best option: High-interest TFSA savings account Why: Immediate accessibility with no penalties, though rates are lower than GICs Top pick: Home Trust (2.40%) or Motive Financial (2.25%)
For Short-Term Goals (2-5 Years)
Best option: TFSA GICs or conservative investment TFSA Why: Higher returns than savings accounts with minimal risk Top pick: EQ Bank 3-year GIC (3.95%)
For Long-Term Growth (5+ Years)
Best option: Investment TFSA with ETFs or stocks
Why: Historically higher returns that outpace inflation over long periods
Top pick: Questrade or Wealthsimple Trade (for self-directed) or Wealthsimple Invest (for automated).
Here’s the thing about TFSAs that many advisors won’t tell you: for truly long-term goals like retirement, an investment TFSA will likely outperform savings TFSAs by a significant margin, even with market fluctuations. The key is your time horizon and risk tolerance.
Beyond the Rate: Other Factors to Consider
While chasing the highest interest rate is tempting, other factors might actually matter more depending on your situation:
Transfer Fees
Most institutions charge $50-150 to transfer your TFSA to another institution. Some, like EQ Bank and Wealthsimple, will reimburse these fees if you transfer in a minimum amount.
Account Fees
Most high-interest TFSAs have no monthly fees, but some may charge transaction fees or inactivity fees. Always read the fine print.
Access to Your Money
How easily can you withdraw funds? Some high-interest TFSAs have limited monthly transactions or withdrawal delays.
User Experience
If you’ll be actively managing your TFSA, a clunky interface can be a real pain. EQ Bank and Tangerine consistently rank high for user experience.
Are Online TFSAs Safe?
One of the most common questions I get is whether these lesser-known financial institutions are safe. Short answer: Yes.
Both CDIC (federal) and provincial deposit insurers protect eligible deposits up to $100,000 per insured category. This means your TFSA at EQ Bank is just as protected as one at RBC or TD.
The only real difference is convenience—you can’t walk into a branch of an online bank. But in exchange for that minor inconvenience, you’re getting rates that are often 20-40 times higher than traditional banks.
How to Maximize Your TFSA in 2025
- Check your contribution room first on the CRA My Account portal
- Consider consolidating multiple TFSAs to avoid duplicate fees and simplify management
- Match your TFSA type to your time horizon (savings TFSA for short-term, investment TFSA for long-term)
- Set up automatic contributions to maximize the tax-free growth period
- Review your TFSA allocation annually to ensure it still aligns with your goals
A little-used strategy: If you have both TFSA and RRSP contribution room, prioritize the TFSA for investments that generate capital gains or dividends, as these are taxed at more favorable rates when in non-registered accounts.
Common TFSA Mistakes to Avoid
Over the years, I’ve seen people make the same TFSA mistakes repeatedly:
- Over-contributing without tracking their limit (which results in a 1% per month penalty)
- Frequent trading within investment TFSAs (the CRA may consider this business activity)
- Holding cash in a TFSA with negligible interest (opportunity cost)
- Making withdrawals without understanding that the room isn’t restored until the following calendar year
- Using your TFSA as a chequing account (wasting tax-sheltered growth potential)
The most expensive mistake? Parking your money in a big bank TFSA paying 0.05% when you could be earning 2.40% elsewhere. On a $25,000 TFSA, that’s a difference of $587.50 per year—money that should be in your pocket, not your bank’s.
Practical TFSA Strategies by Age Group
In Your 20s-30s
Maximize growth potential with an investment TFSA focused on equity ETFs. You have time to weather market fluctuations.
In Your 40s-50s
Consider a mixed approach: investment TFSA for longer-term portions, GICs for funds needed in 2-5 years.
In Your 60s+
Safety and income become priorities. Higher-interest savings TFSAs and GICs can provide reliable income without risk.
TFSA vs. RRSP: Which Should You Prioritize?
This classic Canadian personal finance question doesn’t have a one-size-fits-all answer, but here’s a simplified decision tree:
- Choose TFSA first if: You’re in a lower tax bracket now than you expect to be in retirement, need flexible access to funds, or have irregular income
- Choose RRSP first if: You’re in a high tax bracket now, have stable employment income, and are disciplined about leaving the funds for retirement
Ideally, aim to eventually max out both—but for most Canadians, the TFSA’s flexibility makes it the logical first choice unless you’re specifically saving for retirement in a high tax bracket.
Frequently Asked Questions
The TFSA contribution limit for 2025 is $7,000. If you’ve been eligible to contribute since TFSAs were introduced in 2009 and haven’t made any contributions yet, your total available contribution room would be $102,000 as of 2025.
Yes, TFSA savings account rates can change whenever the financial institution decides to adjust them, typically in response to Bank of Canada policy rate changes. GIC rates are locked in for the term you select, which is why some people prefer them during periods of anticipated rate decreases.
Absolutely! You can have as many TFSAs as you want at different institutions. Just remember that your contribution limit applies across all your TFSAs combined, not to each account separately. Having multiple accounts doesn’t give you additional contribution room.
Over-contributions are subject to a penalty tax of 1% per month on the excess amount until you withdraw it. The CRA tracks your contributions and will notify you if you’ve over-contributed, but it’s best to monitor this yourself to avoid penalties.
Yes, but timing matters. When you withdraw money from your TFSA, that amount gets added to your contribution room—but only at the beginning of the following calendar year. If you withdraw and then recontribute in the same year without having available contribution room, it would count as an over-contribution.
Yes, all withdrawals from a TFSA are completely tax-free, including any interest, dividends, or capital gains earned within the account. This is one of the biggest advantages of TFSAs over RRSPs, which are taxed upon withdrawal.
Yes, you can transfer your TFSA from one institution to another. However, you should request a direct transfer rather than withdrawing the money yourself and redepositing it. A direct transfer preserves your contribution room, while a withdrawal-redeposit sequence could result in over-contribution penalties if you’ve already used your contribution room for the year.
Both are tax-sheltered, but they hold different types of assets. A TFSA savings account holds cash and earns interest, while a TFSA investment account can hold stocks, bonds, ETFs, and mutual funds. Investment TFSAs typically offer higher potential returns but come with market risk, while savings TFSAs offer guaranteed but lower returns.
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Final Thoughts: Don’t Let Perfect Be the Enemy of Good
The absolute best TFSA strategy is the one you’ll actually implement. Yes, an investment TFSA might theoretically outperform a savings TFSA over time, but if market volatility will keep you up at night, the “perfect” strategy isn’t perfect for you.
Start with what you’re comfortable with, even if that’s just moving your existing TFSA to a higher-interest option. That single move could multiply your interest earnings many times over with zero additional risk.
Remember: Personal finance is personal. Your TFSA strategy should reflect your goals, timeline, and risk tolerance—not what worked for someone else.
Have you recently switched to a higher-interest TFSA? I’d love to hear about your experience in the comments!
Note: All rates are current as of April 2025 and are subject to change. Always verify current rates directly with financial institutions before making decisions.
