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Published January 5, 2024
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Scotiabank TFSA Review: Pros, Cons and Who It’s For

Scotiabank’s TFSA is a tax-advantaged registered account. It can help you save and invest in tandem, but may charge fees or have limited investment options.

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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

    Pros

    Cons

    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[1]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[2]. CIBC ranks highest in online banking satisfaction, while RBC Bank ranks third.

    At the time of this writing, Scotiabank had a Trustpilot rating of 1.2 out of 5 possible stars, based on more than 870 customer reviews.

    At the time of this writing, Scotiabank had a Better Business Bureau rating of 1.19 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.

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    Scotiabank TFSA details and eligibility

    Who qualifies for Scotiabank TFSA?

    To open a Scotiabank TFSA, you must:

    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:

    How to maximize the benefits of a Scotiabank TFSA

    To get the most out of your tax-free savings account, you’ll want to:

    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:

    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 AccountScotiabank Momentum Plus Savings Account
    DescriptionTax-advantaged savings account capable of holding cash and investments.High-interest savings account.
    Interest rateUp to 0.80%.Regular: 1.30%
    Bonus offer: An extra 3.40%.
    Annual contribution limit$6,500 for 2023.None
    Tax-free earningsYesNo
    Can hold investmentsYesNo

    Scotiabank TFSA facts

    What is a TFSA?

    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.

    Interest Rates

    Ongoing interest rate as of January 2024

    The standard interest rate for Scotiabank’s TFSA is 0.01% as of Jan. 5, 2024.

    Savings Accelerator rate as of January 2024

    The Savings Accelerator rate for Scotiabank’s TFSA is 0.75% to 0.80%, depending on the balance, as of Jan. 5, 2024.

    Minimum balance

    There is no minimum deposit requirement to open a Scotiabank TFSA and no minimum balance needed to avoid any account fees.

    Contribution limit

    The annual TFSA contribution limit for 2023 is $6,500.

    Fees

    Monthly fee

    There are no monthly account fees for Scotiabank’s TFSA.

    Transfer fee

    There is a $150 fee associated with transferring funds from a Scotiabank TFSA to an external account.

    Withdrawal fee

    There is a $5 fee associated with in-personal transfers from a Scotiabank tax-free savings account.

    Frequently asked questions for Scotiabank TFSA

    Is it worth it to get the Scotiabank TFSA?

    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.

    How do I deposit or withdraw money from a Scotiabank TFSA?

    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.

    Article Sources

    Works Cited
    1. J.D. Power, “2023 Canada Retail Banking Advice Satisfaction Study,” accessed January 5, 2024.
    2. J.D. Power, “2023 Canada Online Banking Satisfaction Study,” accessed January 5, 2024.

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