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Scotiabank TFSA: Best for Scotiabank customers who want to try self-directed investing.
Scotiabank’s TFSA provides the opportunity to invest and save in a single account, with no monthly fees.
Scotiabank TFSA pros and cons
- Earns interest.
- No monthly fees.
- Tax-free savings growth.
- Holds cash and investments.
- Tax-free withdrawals at any time.
- $5 fee for in-person transfers.
- Investment options are limited.
- Annual contributions are limited by the government, as with all TFSAs.
- Overcontributions are taxed, as with all TFSAs.
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Scotiabank TFSA full review
Scotiabank’s TFSA is a tax-advantaged registered account. It can hold cash and investments to help you save and invest in tandem. Uninvested cash earns interest; investment options are limited to Scotiabank products. Tax-free savings account contributions are capped at $6,500 annually for 2023.
Benefits of a Scotiabank TFSA
Scotiabank TFSAs earn interest on cash contributions and can hold Scotiabank investment products, like mutual funds and GICs. Interest, investment gains and dividends are tax-free, and there are no monthly fees.
Scotiabank tax-free savings accounts qualify for Scotiabank’s Savings Accelerator program, an interest-generating add-on that lets you earn 0.75% to 0.80% on any uninvested cash in your account. Without it, uninvested cash balances currently earn just 0.01%.
Drawbacks of a Scotiabank TFSA
Contribution limits — a TFSA regulatory restriction you’ll encounter regardless of the provider — restrict the amount you can deposit into your account annually. In 2023, the annual TFSA contribution limit is $6,500.
You can invest through a regular Scotiabank tax-free savings account, but you’re limited to Scotiabank mutual funds and GICs. If you want a broad spectrum of investment options, like stocks and exchange-traded funds, you’ll need to select a self-directed TFSA and sign up for ScotiaMcLeod or Scotia iTrade, Scotiabank’s investment platforms.
If you add the Savings Accelerator to your TFSA, you’ll be charged $5 per in-person account withdrawal, though online and phone transfers are free.
And you can’t apply for a TFSA account online unless you’re already a Scotiabank customer.
What is Scotiabank?
The Bank of Nova Scotia, or Scotiabank, offers personal and business banking services to customers across the Americas. It was founded in 1832 in Halifax, Nova Scotia, and is one of Canada’s Big Six banks. While it offers Canadians over 900 locations to bank from, its branch network spans some 40 countries with locations that number in the thousands.
Scotiabank customer satisfaction ratings
Scotiabank ranks fourth in customer satisfaction with retail banking advice, according to J.D. Power’s 2023 Canada Retail Banking Advice Satisfaction Study, a survey of 2,911 retail bank customers in Canada. RBC Royal Bank has the highest ranking.
Scotiabank ranks second in online banking satisfaction according to J.D. Power’s 2023 Canada Online Banking Satisfaction Study, a survey of 8,242 retail bank and credit card customers nationwide. CIBC ranks highest in online banking satisfaction, while RBC Bank ranks third.
At the time of this writing, Scotiabank had a Trustpilot rating of 1.3 out of 5 possible stars, based on more than 832 customer reviews.
At the time of this writing, Scotiabank had a Better Business Bureau rating of 1.14 out of 5 possible stars, based on just over 110 customer reviews.
Is Scotiabank reliable and secure?
Scotiabank carries Canada Deposit Insurance Corporation (CDIC) insurance, which protects deposits of up to $100,000 in the unlikely event that Scotiabank goes under.
Scotiabank also offers an online security guarantee which aims to protect its customers from fraudulent activity that may occur on its online banking platform. The guarantee pledges to fully reimburse lost funds so long as you’ve adhered to Scotiabank’s online security guidelines.
Scotiabank TFSA details and eligibility
Who qualifies for Scotiabank TFSA?
To open a Scotiabank 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 a Scotiabank TFSA?
Anyone interested in a tax-advantaged account that lets you simultaneously save and invest should consider a Scotiabank TFSA. This account could be an especially convenient fit if you already bank with Scotiabank. You can manage your accounts from a single platform and cut back on account transfer fees — Scotiabank charges $150 for transfers to accounts outside its network.
As a straight-up savings account, the 0.75% to 0.80% interest rate you get with Scotiabank’s TFSA isn’t particularly competitive, so if you don’t plan to invest, this account may not be worth it.
How to know if a Scotiabank TFSA is right for you
If you’re eager to earn untaxed interest on your savings and investments, have unused TFSA contribution room, and are already a Scotiabank customer, a Scotiabank TFSA might be right for you.
How to open a Scotiabank TFSA
Method and general steps
If you’re a Scotiabank customer, you can sign in to your online account and fill out a TFSA application. Otherwise, you’ll need to book an appointment at a Scotiabank location during business hours to apply.
Deposit and withdrawal process
Deposits can be made by cash, cheque or electronic funds transfer. Scotiabank’s TFSA cannot receive Interac e-transfers. Deposits can be made through Scotiabank’s online banking platform, mobile app or in person at a branch during business hours. Before making a deposit, ensure doing so will not cause you to exceed annual contribution limits.
Uninvested TFSA funds are available for withdrawal at any time. If you’ve invested in any mutual funds, your withdrawal request may take up to three business days to process. If you’ve invested in Scotiabank GICs, you may pay a penalty for withdrawing funds before the term ends.
If you add the Scotiabank Savings Accelerator to your TFSA, in-person withdrawals are subject to a $5 fee.
Customer service options
Contact the Scotiabank customer support team by:
- Live chat. Connect with a Scotiabank rep 8 a.m. to 10 p.m. ET any day of the week.
- Phone. Call 1-800-472-6842 to talk to a member of the team 24/7.
- In person. Visit a Scotiabank location during business hours.
- Social media. Connect with Scotiabank on Twitter.
How to maximize the benefits of a Scotiabank TFSA
To get the most out of your tax-free savings account, you’ll want to:
- Invest. Failing to take advantage of the TFSA’s ability to hold investments is a missed opportunity for profit.
- Add the Savings Accelerator. This Scotiabank add-on lets you increase the interest rate on your uninvested cash.
- Don’t overcontribute. Any contribution you make over your annual TFSA contribution limit will be taxed at 1% monthly until it’s withdrawn.
Scotiabank TFSA alternatives
Tax-free savings accounts are a nearly ubiquitous offering across financial institutions, which means you have plenty of alternatives to choose from if Scotiabank’s TFSA doesn’t appeal.
Reasons you might want a different TFSA
Some account drawbacks, like over-contribution rules, are standard for TFSAs and out of Scotiabank’s hands. Other shortcomings are specific to Scotiabank and may prompt you to seek an account elsewhere:
- Higher interest rate. Scotiabank’s current TFSA interest rate, even with the Savings Accelerator add-on, isn’t much to write home about. As far as the Big Six Banks are concerned, Scotiabank’s rate is typical, but credit unions and online-only banks may offer higher rates.
- Online application. Scotiabank’s online TFSA applications are limited to existing customers, so if you don’t want to visit a branch to open an account, consider a TFSA elsewhere.
- In-person withdrawals. The $5 per in-person withdrawal penalty only applies if you’ve added the Savings Accelerator to your account, but this fee isn’t standard for TFSAs.
Tax-free savings account vs. High-interest savings account
Both TFSAs and high-interest savings accounts can help you grow your wealth, but what separates these accounts may help you determine which is best for your finances.
|Scotiabank Tax-Free Savings Account||Scotiabank Momentum Plus Savings Account|
|Description||Tax-advantaged savings account capable of holding cash and investments.||High-interest savings account.|
|Interest rate||Up to 0.80%.||Regular: 1.40%
Bonus offer: An extra 3.10%.
|Annual contribution limit||$6,500 for 2023.||None|
|Can hold investments||Yes||No|
Scotiabank TFSA facts
What is a TFSA?
A tax-free savings account, or TFSA, is a registered account designed to hold cash and investments. The uninvested cash in a TFSA earns interest, like a savings account. And investments in the account, like mutual funds and GICs, have the potential to earn market-based gains.
Investment gains, interest and dividends are tax-free. Annual account contributions are limited, and contributions beyond your annual limit are taxed.
Ongoing interest rate as of October 2023
The standard interest rate for Scotiabank’s TFSA is 0.01% as of October 13, 2023.
Savings Accelerator rate as of October 2023
The Savings Accelerator rate for Scotiabank’s TFSA is 0.75% to 0.80%, depending on the balance, as of October 13, 2023.
There is no minimum deposit requirement to open a Scotiabank TFSA and no minimum balance needed to avoid any account fees.
The annual TFSA contribution limit for 2023 is $6,500.
There are no monthly account fees for Scotiabank’s TFSA.
There is a $150 fee associated with transferring funds from a Scotiabank TFSA to an external account.
There is a $5 fee associated with in-personal transfers from a Scotiabank tax-free savings account.
Frequently asked questions for Scotiabank TFSA
A tax-free savings account can be a practical way to save and invest. Tax advantages set it apart from traditional savings accounts, though account contributions will limit the amount you can deposit annually.
Scotiabank TFSA deposits can be made by cash, cheque or electronic funds transfer through its online banking platform or at a Scotiabank location during business hours. You can withdraw funds at any time. Fund availability depends on whether you’re withdrawing uninvested cash or from existing investments. If you add the Savings Accelerator to your Scotiabank TFSA, you’ll be charged a $5 fee per transfer made in person at a Scotiabank location.
J.D. Power, “2023 Canada Retail Banking Advice Satisfaction Study,” accessed October 16, 2023.
J.D. Power, “2023 Canada Online Banking Satisfaction Study,” accessed October 16, 2023.
The tax-free withdrawals of a TFSA offer more flexibility, but the tax-deferred contributions of an RRSP are great for retirement. The type of account you choose will depend on your savings goals.