Hooray! Tax-free savings account!

To encourage people to save, the Canadian government created a tax-free savings account. You put after-tax dollars into it, and the interest is tax-free. The contribution limit for this year is $5,000.

PCFinancial and ING Direct are two Canadian banks with great interest rates. Currently, ING Direct (0.27%) is better than PCFinancial’s Interest Plus (1% on 0-$1000, 2.75% on $1000 and up) for amounts less than $53,000, and you probably wouldn’t want to keep that much money in a savings account anyway. PCFinancial does have an anniversary bonus and it’s easier to transfer money back and forth between accounts, and sometimes PCFinancial’s rate is a little bit higher than ING. ING Direct’s GICs seem to be a better deal, though, and they come with more options.

If you do set up an ING Direct account (and deposit at least $100 into it), you can use my referral code (Orange Key: 29083948S1) for a $13 bonus. I’ll get a $13 bonus, too, so everyone’s happy. =)

I’m setting up some transfers. Looking forward to taking advantage of that tax-free deal! Maybe another set of laddered GICs…

  • Ric Z.

    Sacha, thanks for the tip – I didn’t know about this. I am already an ING Direct client so I just signed up with them, quite easy and painless, and unfortunately, I do not qualify for the $13 bonus (since I am an existing client). Yes, a laddered GIC is a good idea.

  • http://arseneault.ca Jean-Francois

    Expect your $13 on your next statement :)
    I figure that’s 13% interest on my initial $100 deposit – not too shabby these days…