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High Rate Interest Account – Tax Free Accounts Canada

There are many banks offering tax free savings accounts in Canada and "high" interest savings accounts.
I've come to notice that most of these banks offer anything but a high rate interest account.

Over the past years of my life, I have looked at different banks and competing interest rates, and I have learned that high rate interest accounts are hard to come by. Even major banks like TD Canada Trust and CIBC cannot really say they offer a high rate interest account. Here are their current Savings Account Interest Rates.

Canadian Savings Account Interest Rates:
TD Canada Trust Savings Account Interest Rates:
http://www.tdcanadatrust.com/accounts/int-calc.pdf
Savings Account: 0.05% (0.25% past the $3,000 mark)

CIBC Savings Account Interest Rates:
http://www.cibc.com/ca/rates/bank-acct-rates.html
Savings Acccount (varied): 0% (0.10% with a $5,000+ balance)

SCOTIABANK Savings Account Interest Rates:
http://scotiabank.com/rates/savings.html#scotiaplus
Savings Account (varired): (0.1%-0.25%)

ICICI Savings Account Interest Rates
http://www.icicibank.ca/personalbanking/popup_sav.htm
Savings Account(varied): (0.75%-1.25%)

Now we're talking. However, further investigation will show you that ICICI isn't all its cracked up to be. Just because a bank is offering a High Rate Interest Account, does not mean they are the best choice for your investment.

Fees and Charges should play a big role in determining which high rate interest, tax free account you should choose for your investment.
ICICI Fees & Charges

A few years ago, my sister told me about a bank that offered a high interest rate account, and had NO fees. Yes, NO FEES! I personally thought this was too good to be true, but after doing my research I realize it was not. I am now currently a happy customer of this bank and have been for a while. I have an Investment Savings Account AND a Tax Free Savings Account (TFSA) which offers one of the best interest rates on the current market. That, along with no fees, and I have been making a good deal of interest on very little principal.

If you haven't heard of them, you must be living under a rock.

Best High Rate Interest Account/Tax Free Accounts Canada
ING Direct is offering one of the best interest rates on the TFSA/GIC Market.
ING Direct Current Savings Account & TFSA Rates
http://www.ingdirect.ca/en/accounts-rates/index.html

Currently, ING Direct is offering a 2% TFSA and a 1.2% Investment Savings Account.
These accounts come with no ING Direct fees & charges.

You should however, read about TFSAs and figure out what your contribution limit is for the year. In Canada at the moment, this amount is $5,000 per year. Contribution Limit means how much you can contribute..if you contribute $5000 and then later withdraw $1000, you cannot recontribute $1000 for the remainder of the year!

ING Direct's TFSA is one of the best High Rate Interest, Tax Free Savings Account.

Joining is easy and can be done in 3 steps:

1. Decide on your account
   http://www.ingdirect.ca/en/signmeup/index.html. I recommend the TFSA (Tax Free Savings Account). ING also offers some high interest rate GIC's and Investment Savings Accounts...although at the moment your money is better off in a TFSA than a GIC. When you find the account you'd like click: Enroll Now!
   
   
2. Fill out the information form. Where it asks for an Orange Key type this: 17190811S1 to receive a $25 bonus when you make an initial deposit of $100. Disclaimer: I will also get a $25 referral bonus when you use this key. If I have educated you and helped you make a good choice, please enter the key to show your appreciation. If you would not like to enter the key, that is also fine. (The purpose of this post was to educate on high rate accounts, not give myself bonuses, however I figured I would include it because who wouldn't want a bonus?) Take Note of the Client ID you are given, you will use this to login to the site, and in Step 3
   
   
3. Write a cheque made out to yourself. If you would like to receive the $25 bonus, you must write a minimum of $100. You can use a minimum of $1, however, you will not receive this bonus. In the memo line write this: Client Number - 2391030 (Replace this with your actual client ID in step 2!) and mail the cheque to:
   
   ING Direct
   111 Gordon Baker Road
   Toronto, ON
   M2H 3R1

Once your cheque has cleared, the account you mailed the cheque from will be electronically linked to your ING Account. You can then use INGDirect.ca to transfer money between the accounts, setup ONGOING ASP (Automatic Savings Plans).

The ASP feature is what really got me to open an account. You can choose an amount and have it withdraw on an ongoing basis. Every 2 weeks, on payday, I have $100 moving from my chequing account with TD Canada Trust to my ING Savings Account. You just set it and forget it....The best part is, you NEVER see the money, so you never miss it. But, under the covers, you are saving, and gaining a great interest rate!

Hope this article helps you on your journey to earning interest on your hard earned money.
Once again, if you would like for us both to receive a $25 bonus please use this code as your orange key: 17190811S1 and deposit a minimum of $100. If you would not like for either of us to receive a bonus, do not enter the key.

Happy Saving and feel free to post comments on how much you have saved with ING!
In a short year of having a small fluctuating balance of under $3000, I have earned close to $200 in interest, compared to measly cents at TD.