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From the brochure of my bank, here is an excerpt:

  • Interest on the TFSA Savings Account is calculated daily and paid monthly.
  • Interest on TFSA GICs is compounded annually and paid at the end of the term.

If GIC is for 1 yr and I am willing to lock the money in for 1 yr, and if both offer same interest rate, is it true that the TFSA will generate a greater P+I at the end of the year?

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Under the assumption that rates are same, the interest paid monthly would generate greater P+I.

However I doubt in practice if if the TFSA Savings rate would be higher than GIC. Typically more the lockin, more the interest.

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