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…