Skip Breadcrumb Links
Personal Banking > Investments > Accounts and Products > TFSAs – Tax-Free Savings Accounts > TFSA Basics > TFSA vs High Interest eSavings

TFSA and High Interest eSavings Account: How Do They Compare?

There are three key differences:

A Tax-Free Savings Account (TFSA) is a registered account whereas the High Interest eSavings Account is an online savings account.
All income earned within a TFSA is tax free whereas interest earned within a High Interest eSavings Account is taxable.
The TFSA has contribution limits and re-contribution restrictions whereas the High Interest eSavings Account does not.

See chart for additional account differences.

Name of account	RBC Tax-Free Savings Account	RBC High Interest eSavings Account
Contribution/Deposit Limits	No limit to the number of deposits, but subject to annual contribution limits ($5,000 in 2009). Excess contributions may be subject to penalty tax of 1% per month; assessed by the Canada Revenue Agency (CRA).	No deposit limitations
Investment Option(s)	Has multiple investment options: Savings Deposit - High interest paid on every dollar; calculated daily and paid semi annually, in June and December. RBC^® GICs – (Non-redeemable, Redeemable, Canadian Market-Linked, Global Market-Linked) RBC Mutual Funds (excluding Third Party Funds and RBC Managed Portfolios)	Is an online savings account High interest paid on every dollar; calculated daily and paid monthly.
Taxation of Interest/ Investment Income	Investment returns – whether interest, dividends or capital gains – are not taxed, even when withdrawn.	Interest income is taxable.
Access to Funds	Withdraw anytime (subject to investments chosen). Withdrawn amount can be re-contributed anytime after the year of withdrawal.	Unlimited online banking transfers to other RBC Royal Bank^® accounts in same name.
Account Ownership	Individual ownership only (must be of legal age who are residents of Canada and have a social insurance number).	Individual or joint ownership.

^® Registered trademarks of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada.
⁺ Registered trademark of Interac Inc. Used under licence.