Personal Finance

TFSA High Interest Savings Account for Quebec residents

  • Last Updated:
  • Dec 24th, 2020 3:43 pm
[OP]
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Sep 14, 2012
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Montreal, QC

TFSA High Interest Savings Account for Quebec residents

With Tangerine interest rates being what I would consider to be non-competitive when compared with other online only banks, I was wondering where to open up a TFSA account with another online only institution (which accepts accounts from Quebec residents).

I was thinking of getting it with Alterna Bank of Canada since I already have a high interest savings account with them.

I have a high interest savings account with LBC Digital whose rates are better than Alterna Bank of Canada's rates (and of course Tangerine's regular rates) and even though Quebec residents can have a high interest savings account with LBC Digital, LBC Digital doesn't seem to have an option to open a TFSA high interest savings account with them.

I checked Manulife Bank since Quebec residents can have an account with them but Manulife Bank's rates for their TFSA and GICs are exactly the same as Tangerine's rates.

Is there any other TFSA high interest savings account which I should be considering for Quebec residents other than Alterna Bank of Canada?
11 replies
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Aug 7, 2010
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Peoples Trust but not much difference in interests rates, currently 1.30%. If interested in GIC in TFSA, their 1 year GIC yields 1.45%.
[OP]
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Sep 14, 2012
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Montreal, QC
komodor wrote: Peoples Trust but not much difference in interests rates, currently 1.30%. If interested in GIC in TFSA, their 1 year GIC yields 1.45%.
Are you sure that they allow Quebec residents to get this account? Their rates look very good.
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lmcjipo wrote: Are you sure that they allow Quebec residents to get this account? Their rates look very good.
Well I don't see anything on their web site preventing that.
Last edited by komodor on Dec 21st, 2020 6:07 pm, edited 1 time in total.
[OP]
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Sep 14, 2012
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Thanks. Their rates are equivalent to what I'm getting with Tangerine so they have a promotional rate but their normal TFSA high interest savings account rate is ~0.10% currently (I think it is 0.15%).

I'm not really interested in promotional rates since the money would be "stuck there" for all of 2021 since I'm maxed out so during January 2021, I would be putting the entire amount of my 2021 contribution limit into the account ($6k) and don't want to either initiate a TFSA transfer or withdraw the money and wait until 2022 to deposit this money into another TFSA account.
[OP]
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Sep 14, 2012
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Poutinesauce wrote: Rosenort Credit Union has the best rates hands now but you need to maneuver carefully to avoid fees.
I'm planning on just depositing the funds ($6k) in January 2021 and then if the rates aren't competitive on/by December 2021, I will withdraw it out of the TFSA so that I can use this withdrawal as a contribution/deposit in 2022. What sort of fees are you referring to? I won't be over contributing nor will I be transfer from one TFSA to another TFSA directly (most institutions charge for transfers from a registered account to another registered account at another institution).
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lmcjipo wrote: I'm planning on just depositing the funds ($6k) in January 2021 and then if the rates aren't competitive on/by December 2021, I will withdraw it out of the TFSA so that I can use this withdrawal as a contribution/deposit in 2022. What sort of fees are you referring to? I won't be over contributing nor will I be transfer from one TFSA to another TFSA directly (most institutions charge for transfers from a registered account to another registered account at another institution).
You only have one free withdrawal a month, and you must use their high yield savings account for that. Essentially, it works if you open both a HYSA and a TFSA account, deposit exclusively in the TFSA account, and when you want money, move it from the TFSA to HYSA, and then withdraw from HYSA, so long as it is not more than once a month. Emailing them a letter is also necessary to move money from TFSA to HYSA. Also, interest accrues monthly based on the lowest amount present in the month. Effectively, it means you should only withdraw money on the first day of the subsequent month where you want it. You also only receive all the interest for all the months on the 30th of December.

If you can handle that, then the rate is 1.9%.

Also, as I think is sort of an issue with all small credit unions, don't expect very stringent security protocols. If you call in for a request or an issue, most of the times the employees asked me zero security questions when I identified myself. Nice folks and I love them, but I don't think I would keep a fortune at a small credit union due to this. That's the inconvenient versus places like Tangerine I guess. These small credit unions target very small communities where everyone knows each other and tends to be very trusting. I guess this is the tradeoff for friendly, cozy and accessible service.

I suggested them to change it but they never implemented it.
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Oct 4, 2009
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lmcjipo wrote: Are you sure that they allow Quebec residents to get this account? Their rates look very good.
Yes, many of us have had accounts there for many years.
[OP]
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Sep 14, 2012
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S5 wrote: Yes, many of us have had accounts there for many years.
Thanks. I might go with them. The thing that bothers me is that they were hacked roughly 5 years ago but then again so was Desjardins and I believe that they are the largest credit union in Canada. Still considering my options.
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May 28, 2007
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You can take a look at Oaken Financial. I have a small amount with them for my TFSA, and I'm near maxed out with their regular Home Trust and Home Bank accounts for CDIC coverage. From what I gathered, their GIC rates were the best for Quebecers when I opened the account years ago. Presently, Peoples has slightly better rates, but I'm wondering if they strengthened their security to prevent future hacks. I think so because there hasn't been any more news about them since the last incident. Although they're also CDIC insured, so no worries in that sense. Just don't know about personal information getting compromised.

The only thing to keep in mind with Oaken TFSA is that they only offer GICs for your TFSA account. When your TFSA GIC expires and you don't have auto-renewal set up, or call in to give instructions before expiration, or go online and put in the renewal term you want, then they're going to put the expired principal and interest into your regular HISA. They don't have a TFSA HISA for the money to go into. The regular GICs can have expired regular GIC money transfer automatically into a regular HISA. So if the money taken out of the TFSA GIC is put into the regular HISA, then you'll have to wait till the following year to put it back into the TFSA. So better to either set up or go online before the expiration to renew the TFSA GIC, or set up your TFSA GIC to expire near the end of the year.

https://oaken.com/

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