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RBC TFSA: Best for RBC customers who prefer easy access to their tax-free savings.
An RBC TFSA won’t offer the highest interest rates in Canada, but the Big Bank can offer a variety of TFSA investment options.
RBC TFSA pros and cons
- Tax-free savings and investment options.
- Tax-free withdrawals at any time.
- No monthly fees.
- Lower interest rates than many online banks.
- Annual contribution limits apply, as with all TFSAs.
- High transfer fee to transfer outside of RBC.
RBC TFSA full review
Royal Bank of Canada, or RBC, is one of the big six banks in Canada and offers several types of tax-free savings accounts to its customers. What makes a TFSA appealing is that any interest, dividends and capital gains earned in the account are completely tax-free. Plus, eligible Canadian residents gain a TFSA contribution room yearly, regardless of their income.
Types of TFSAs available from RBC
RBC offers different types of tax-free savings accounts depending on the kind of savings and investments you want to hold and how you want to manage your TFSA.
- Standard TFSA. This RBC TFSA gives you access to advice from RBC financial advisors, while allowing you to hold products such as guaranteed investment certificates (GICs), mutual funds and savings.
- RBC InvestEase. This TFSA option offers a low-cost portfolio of exchange-traded funds (ETFs), built and managed for you by RBC advisors.
- RBC Direct Investing. This do-it-yourself route is a TFSA that allows you to make trades. Direct Investing is RBC’s discount brokerage, so you’ll make all the trades yourself, but you’ll have access to investor resources and research.
Benefits of an RBC TFSA
The major benefit of an RBC TFSA is the flexibility it gives investors. It doesn’t matter if you’re a first-time investor in your early 20s or preparing for retirement. RBC TFSAs allow you to purchase various investment products within your account, so you can build a portfolio that meets your goals, risk tolerance and timeline.
It’s important to note that a TFSA is strictly a type of registered account. Once you’ve opened an account, you’ll need to deposit cash and purchase investment products within your new TFSA. If you’re new to investing, an RBC advisor can recommend products based on your risk profile.
Drawbacks of an RBC TFSA
The major drawback of any TFSA is the yearly contribution limit, which is $6,500 for 2023. This limit is set by the government and is the same regardless of where you open your TFSA. That said, any unused contribution room carries forward indefinitely, so you’ll have a chance to catch up in the future.
The other drawbacks of RBC TFSAs depend on the type of TFSA you open. With a standard TFSA account, you’re limited to investing in GICs, mutual funds and savings deposits. If you want access to individual stocks, bonds and ETFs, you must open an RBC Direct Investing account. Opening this type of account is easy, but it does require some additional investor knowledge. Investors can opt-in for the RBC InvestEase platform to manage their investments for a fee.
What is RBC?
RBC was founded in 1864 in Halifax, Nova Scotia, as the Merchants Bank of Halifax. Since then, the bank has grown to be one of the big six banks and now has about 87,000 employees and 17 million clients worldwide.
In addition to TFSAs, RBC offers products such as bank accounts, investment advice, mortgages, credit cards, and more. RBC’s head office is located in Toronto, Canada, but it also has global offices in the United States, Australia, China, France, Hong Kong, the United Kingdom, Spain, and more.
RBC customer satisfaction ratings
RBC ranks first (tied with BMO, the Bank of Montreal) in customer satisfaction with retail banking advice, according to J.D. Power’s 2022 Canada Retail Banking Advice Satisfaction Study , a survey of 2,351 retail bank customers in Canada.
RBC ranks first in online banking mobile app satisfaction, according to J.D. Power’s 2022 Canada Online Banking Satisfaction Study , a survey of 8,267 retail bank and credit card customers nationwide.
At the time of this writing, RBC had a Trustpilot rating of 1.2 out of 5 possible stars, based on more than 800 customer reviews.
At the time of this writing, RBC had a Better Business Bureau rating of 1.28 out of 5 possible stars, based on more than 100 customer reviews.
Is RBC reliable and secure?
RBC is a member of the Canada Deposit Insurance Corporation (CDIC). That means your eligible deposits are insured up to $100,000, per account. RBC GICs, term deposits and cash in your TFSA would qualify for protection under CDIC insurance.
RBC is also a Canadian Investor Protection Fund (CIPF) member. In the unlikely case that RBC fails, your investments, such as stocks, mutual funds, and ETFs held within your TFSA, would be covered up to $1,000,000.
In addition, RBC uses the highest possible standards when it comes to security. The bank has multi-layered secure servers, multiple layers of internal and external firewalls, Secure Socket Layer (SSL) 128-bit encryption and more.
RBC TFSA details and eligibility
Who qualifies for an RBC TFSA?
To open an RBC TFSA, you must:
- Be a Canadian resident.
- Be over the age of majority in your province or territory.
- Have a valid Social Insurance Number (SIN).
Who should get an RBC TFSA?
The RBC TFSA account is ideal for an RBC Royal Bank customer who finds it convenient to have their spendings, tax-free savings and investment accounts all under one roof. This arrangement will help save time with online banking and cut costs on transfer fees.
Although, you may find a higher interest rate with an online bank if you don’t mind having multiple bank accounts.
How to know if an RBC TFSA is right for you
If you’re an RBC customer looking to hold or invest your savings, tax-free with an unused TFSA contribution room, an RBC TFSA might be right for you.
How to open an RBC TFSA
Method and general steps
Opening a TFSA with RBC is easy. Just follow these steps:
- Go to the RBC website.
- Hover over the “Investments” menu and click “Tax-Free Savings – TFSA.”
- Scroll down to “Invest in a TFSA Today” and choose the type of TFSA you want (access to advice, build and managed for me, or TFSA I can trade in).
- If you already have an RBC account, sign into your online banking profile and you’ll be able to open an account right away.
- If you’re a new RBC customer, you’ll need to call an RBC advisor or visit a local branch to open a TFSA.
Deposit and withdrawal process
Once you’ve set up your RBC TFSA, you need to fund your account or purchase investment products. How you do this depends on your account. With a standard TFSA, you can have your advisor withdraw funds directly from your bank account to purchase products.
If you opened an RBC InvestEase or Direct Investing account, you’ll need to move money into it before you can invest it. You’ll do this through your RBC online banking. Choose the “Move Money” tab and then choose the bank account you’re moving funds from and the account you’re moving funds to. Once the money is in your InvestEase TFSA, you can invest in the recommended portfolio.
When it comes to withdrawals, you can only access funds from cashable investment products. One of the exceptions is the non-redeemable GICs that are only available at maturity. Once the funds are available in cash, you could move them back into your bank account.
If you withdraw money from a TFSA, you can re-contribute that amount in the following year.
Customer service options
If you need assistance opening a TFSA with RBC or have questions about your account, you can contact an advisor for help via several methods:
- Phone. Call 1-800-463-3863 for live support. If you use RBC Direct Investing, the number is 1-800-769-2560. They’re open Monday to Friday from 7 a.m. to 8 p.m. ET.
- In person. Call your local branch to set up an appointment during business hours.
- Send a direct message. RBC Direct Investing clients can send a direct message to customer support from within their accounts.
How to maximize the benefits of the RBC TFSA
Opening an RBC TFSA is simple. However, if you want to maximize the benefits of your account, consider the following:
- Invest your money. Some people falsely assume that a TFSA can only be used as a savings account. That’s untrue, as you can invest in products that have higher growth potential, such as mutual funds, stocks and ETFs. If you’re new to investing, ask an advisor for help.
- Maximize your contributions. Although you don’t get a tax break when you contribute to your TFSA, all capital gains and interest earned in the account is tax-free. Maxing out your account by contributing up to the annual limit is ideal since you’ll pay taxes on your investment gains in other accounts.
- Start early. Even if you can’t max out your TFSA immediately, opening an account as soon as possible is preferred, so your money has more time to grow.
- Don’t over contribute. You can contribute up to theTFSA limit, which you can check in your account with the Canada Revenue Agency. If you exceed that amount, you’ll be charged 1% of the excess amount each month by the CRA until you withdraw the excess funds.
RBC TFSA alternatives
Most financial institutions offer similar TFSAs, so it doesn’t make a huge difference which bank you choose. That said, a TFSA may not be for everyone. Some people may prefer to focus on contributing to a registered retirement savings plan (RRSP), since these contributions help reduce their taxable income.
Reasons you might want a different TFSA
Even though the benefits of an RBC TFSA are clear, you may want to open an account at a different institution for one of the following reasons:
- You’re not an RBC client. Many people prefer to keep their banking and investing accounts at one financial institution. This can make it easier to move money between accounts and contribute to your TFSA. If you don’t already bank with RBC, you may want to see what TFSA options are offered by your current bank or credit union.
- Higher interest rates. Those using their TFSA for savings should consider a bank that offers a high interest rate. Many online-only banks typically have higher interest rates on savings accounts than the big six banks.
- Available promotions. Some banks have limited-time promotions where you can earn additional interest, cash, gift cards or even electronics when you open an account.
It’s important to read the fine print so you fully understand the requirements to earn the bonus and can decide whether it’s truly the best account for you.
TFSA vs. high interest savings account
Each of these RBC savings accounts serve a purpose. Compare the features, interest rates and other factors to find the most ideal account to satisfy your immediate or future financial needs.
|RBC TFSA||RBC High Interest eSavings|
|Purpose||A registered account for tax-free earnings and withdrawals||High interest-earning account|
|Interest rate||0.80%||Regular: 1.50%
Bonus offer: extra 3.10%
|Annual contribution limit||$6,500 for 2023||N/A|
|Over-contribution penalty tax||1% per month on excess contributions||N/A|
RBC TFSA facts
What is a TFSA?
A TFSA is a registered account where capital gains, dividends and interest earned are tax-free. There’s a yearly contribution limit, but any unused room gets carried forward indefinitely. There is no tax break when making contributions.
Promotional rate as of April 2023
RBC’s TFSA has no promotional interest rate as of April 10, 2023.
Ongoing interest rate as of April 2023
RBC’s TFSA’s ongoing interest rate is 0.8% as of April 10, 2023.
RBC TFSAs have no minimum savings amount, though you may need to invest a minimum amount when purchasing GICs or mutual funds.
The TFSA contribution limit for 2023 is $6,500.
RBC’s standard TFSA and InvestEase have no monthly fees.
RBC Direct Investing users are charged $25 each quarter. That fee is waived if you maintain a minimum balance of $15,000 across all of your RBC Direct investing accounts. It’s also waived if you:
- Set up pre-authorized contributions of at least $100 per month
- Have had your RBC Direct Investing account for less than 6 months
- Pay commissions on three or more trades per quarter, or
- Have certain banking packages, such as student or VIP banking
There is a $150 transfer fee when you transfer your RBC TFSA to another institution.
There is no fee associated with withdrawing funds from an RBC TFSA. That said, a trading fee of $9.95 will apply if you sell securities within RBC Direct Investing before making a withdrawal.
Other Features & Benefits
RBC’s standard TFSA and InvestEase allow you to make automatic monthly contributions. If you use RBC Direct Investing, you can set up your account so any eligible dividends are automatically reinvested without fees.
Frequently asked questions for RBC TFSA
If you have an existing RBC chequing or savings account, you can add funds using the RBC online banking or mobile app, via phone banking (call 1-844-357-8242), or by visiting your nearest branch.
You don’t pay any monthly RBC TFSA fees.
There’s no fee for withdrawing funds from your account. But a $9.95 trading fee will apply if you sell securities within RBC Direct Investing before making a withdrawal.
RBC Direct Investing users are charged $25 each quarter but this fee is waived when you meet certain conditions. There is a $150 transfer fee if you transfer your RBC TFSA to another institution.
J.D. Power, “2022 Canada Retail Banking Advice Satisfaction Study,” accessed April 21, 2023.
J.D. Power, “2022 Canada Online Banking Satisfaction Study,” accessed April 21, 2023.
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