Personal Finance

TFSA mutual fund vs. Savings Account

  • Last Updated:
  • Apr 5th, 2019 9:44 pm
Dec 25, 2010
454 posts

TFSA mutual fund vs. Savings Account

So I currently have a TFSA mutual fund at CIBC and one at Tangerine with a 1.2% interest rate. I've been reading online about Alterna bank who has a much better interest rate for a TFSA. Would it be better to invest in the mutual fund or get the guaranteed interest from the savings account?

I'm in my early 30s and just looking to grow some medium term savings.

1 reply
Deal Guru
User avatar
May 8, 2009
14216 posts
Not Leask
Depends on many factors...
  1. SCU TFSA is currently at 2.85%. GIC's may peak over 3% at times, but still. SCU's interest calculation and payout is more similar to a GIC, so it's a good one if you anticipate stashing funds in there until at least year end. Motusbank, Hubert, IdealSavings offer TFSA currently at 2.5% interest
  2. mutual funds may yield higher earn, but also have MER's. It's important to get acquainted with the fees and past performance of each MF. If you plan on holding funds in TFSA for longer term, this is likely the way to go
  3. If you don't plan on maxing out your contribution room in either option for TFSA, you could easily do both
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