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Personal Banking > Investments > Accounts and Products > TFSA – Tax-Free Savings Account > TFSA Basics > TFSA vs High Interest eSavings

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

There are three key differences:

  1. A Tax-Free Savings Account (TFSA) is a registered account whereas the High Interest eSavings Account is an online savings account.
  2. All income earned within a TFSA is tax free whereas interest earned within a High Interest eSavings Account is taxable.
  3. 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.

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Investment Income Investment returns – whether interest, dividends or capital gains – are not taxed, even when withdrawn.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 Withdrawn amount can be re-contributed anytime after the year of withdrawal.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.


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