Are you looking for a safe, easy-to-access, tax-free account for your savings?
Those were our top priorities when we finally made the decision to downsize our home and get serious about our finances (you can read the full story here).
Also see: Downsizing and Starting Over – Make it Work!
We also wanted to earn a modest amount of interest, and ideally, skip the taxes on the extra income.
So that began our search for the BEST Tax-Free Savings Account we could find in Canada.
After several weeks of research we chose to move our funds into a Tangerine TFSA Account, and have now been reaping the benefits for the past 3 years!
In this post I’ll show you the pros and cons of opening your own account so you can choose the best options for your hard earned money, plus a few helpful tips.
This post contains affiliate links. See thedisclosurepage for more details.
Ready to start now? Visit Tangerine here and use Orange Key 50035010S1 to see if you’re eligible for a cash bonus!
Tangerine Tax-Free Savings Account (TFSA) Review
This account gives you the same advantages of a regular Savings Account
– no minimums, and no service charges or fees – with the added benefit of paying no tax on interest you earn or on your withdrawals.
The current interest rate is 1.10%, which is nothing to brag about, BUT Tangerine regularly has promotions with rates up to 2.75% (find tips to maximize this below).
What really sold me on this account is that you can easily move your money at any time (we’ve now switched most of our accounts over to Tangerine) and you’re never locked in (plus no minimum balance requirement).
This makes it super easy to get your savings started, with no risk!
There’s also an Automatic Savings Program (ASP) to move money directly into your account each month.
How is this different from a Tax-Free Guaranteed Investment Account?
With a Tangerine Investment Account you can lock into set terms (starting at 90 days) and get a guaranteed return at the end. To maximize your earnings, a 1.5 year or more term provides the best rates.
For some, this may be the best option. However we currently don’t have a long term plan for our savings and love the flexibility of the TFSA.
How is this different from a Tax-Free Investment Fund?
With a Tangerine Investment Fund you’ll get a smart indexing strategy, low Portfolio costs, global diversification and the ability to invest automatically with an Automatic Savings Program. The returns can be GREAT, but you also take on some risk.
This may be an option for us in the future, but for now we’re choosing to skip the risk and take a lower rate of return.
Ready to start now? Visit Tangerine here and use Orange Key 50035010S1 to see if you’re eligible for a cash bonus!
How can you get the best interest rate?
Like I’ve already mentioned, Tangerine often has special rate promotions you can take advantage of. They typically seem to last between 3-6 months, so mark the ending dates on your calendar and keep tabs on your account.
If you don’t accept the next offer, you won’t receive the extra interest!
Also, keep in mind that many promotions are for new deposits only. You can take advantage of this by sharing a joint account with your spouse or partner and moving funds around based on the highest interest rate (not everyone is offered the same rate at any given time).
If you have a TFSA with a different bank, you can also move funds back and forth to maximize your options.
However, with both of these strategies you’ll need to keep a close eye on your contribution limit to avoid tax fees.
Do I recommend a Tangerine Tax-Free Savings Account?
Yes! Whether you’re just starting you savings or have a comfortable nest egg, this TFSA is a great option for your funds.
The most important thing you can do with your savings is to not just let it sit in a standard low interest savings account!
We’ve made over $500 this year in interest that we would have missed out on with a basic savings account.
The Tangerine TFSA is great way to start building financial momentum, with no risk.
Ready to start now? Visit Tangerine here and use Orange Key 50035010S1 to see if you’re eligible for a cash bonus!
Do you already have a Tangerine Tax-Free Savings Account? Leave your review below.
