I have quickly changed my mind (see my earlier post) and decided to go with President’s Choice Financial Tax-Free Savings Account (TFSA) instead of ETrade for short-term savings. I will keep my ETrade TFSA though and use it once I have money available for longer term savings.
I compared PC’s Tax-Free Interest Plus Savings Account with ING’s Tax Free Investment Savings Accounts and PC’s interest rate is 1.05% higher. We also have all our daily banking and high interest savings at PC now so being able to use PC for our TFSA.
I’m not surprised that PC Financial has better rates. I was surprised when I moved to Canada that PC Financial beat ING when it came to high interest savings accounts.
I have chequing and savings at PC Financial. How do these new savings accounts work? If I opened one, could it replace my current savings account? Or are there penalties associated with taking the money out? Thanks, Erin
It could replace your existing savings account. There are no penalties charged by the government for taking money in an out as far as I know. It may increase the amount of paperwork you have to do at tax time, however, as you may have to calculate a “net withdrawal” and “net contribution” amount for the year, which would involve looking back at all the transactions in and out. Not sure though. PC may change you a fee every time you transfer in and out, just like they change per debit transaction (depending on your plan of course).
Just wait until people start using them a bit and wait and see about penalties or how the tax calculations work on the tax return. There’s no huge rush as you’ll only be able to put in $5000 for 2009 and the tax savings and interest rate bonus of 1% will not add up to much.
Thanks! I’ll wait and see about them. What do you mean about PC charging for debits? I haven’t found that they do.
Sorry I was thinking about other banks where they charge you for everything by default (even checking balances and transferring money) if you don’t have a “plan”. I forgot that PC has no plans…it’s all free!
PC finnacial has bes rates at the moment for tax free saving.Read carefully this rate is only untill march so they can open as many accounts as possible.And after march are subjekt to change.Rest of rates on regular taxable accounts are competitive vith ING.Only 0.05%higher plus yearly bonus
Did you notice the change to PC Financial’s rate of interest on the tax free account? It went from 3.75 to 3.05 (.05% higher than ING).
Yeah I had a feeling they would do that. I’m just glad they are still higher than ING. I do all my banking at PC now so it’s convenient that I didn’t have to open my TFSA somewhere else.
Does anyone else find it odd that the tax-free accounts are now often paying higher interest than the “high-interest” accounts at the same institution? Does anyone know if there is a savings plan out there (other than mutual funds) that pays closer to 12% and still minimizes risk? Or am I just a dreamer? Thanks!
Catherine, yep, you’re dreamin’. Anything that pays 12% is also likely to lose 20% or more.
Thanks for the response. I figured as much, but didn’t want to miss out if something like that did exist! So in other words, unless I’m willing to play the stock markets and accept a large risk factor to match the big percentage, it’s pretty much 2-4% savings accounts whose interest rates are dropping steadily every month? So, what do you recommend that can grow a person’s savings faster than that, but with almost as little risk? And does it mean the funds are locked in and not accessable should the need arise or if I just want to reinvest it elsewhere? Thanks for your help.