ICICI Bank Canada Tax-Free Savings Account

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Hello fellow Canadian savers and investors. You may be interested in knowing that ICICI Bank Canada – the bank that I recommend for high interest savings accounts – is now offering Tax-Free Savings Accounts (TFSA). If you don’t know what a TFSA is checkout this brief:

TFSA is a registered account introduced in response to new legislation from the Federal Government in the 2008 Budget. Investment income in the account will grow tax-free.

Now that you know the basics, let’s move on and get into some of the details of the ICICI Bank Canada TFSA.

ICICI Bank Canada TFSA Savings Account Details:

  • High Interest Rate: Earn 3.00% p.a. interest .
  • No Fees: Keep all of your money. There are no monthly or annual administration fees, so you can watch your money grow faster.
  • Flexible: No minimum balance.
  • Convenient Banking:You may do your banking online or by phone at your convenience
  • Safe and Secure: ICICI Bank Canada is a member of CDIC

Contribution:

  • Up to C$5,000 in year 2009. This amount may increase in the future to take inflation into account.
  • This C$5,000 limit is in addition to your RRSP contribution limit
  • Unused contribution room can be carried forward indefinitely

Withdrawals:

  • Withdrawal is not subject to income tax.
  • The amount withdrawn from a TFSA can be put back at a later date, without reducing your contribution room.

*The 3% interest rate is 50 basis points higher (0.50%) than what they offer on their regular high interest savings account – 2.50% (as of Jan 24, 2009 – subject to change)*

I for one believe that this new TFSA initiative launched by the Canadian Government is a good thig, and I commend them for implementing such a smart policy. Hopefully it will help to increase the personal savings rate of Canadians.

However, what I don’t like is that the deposit maximum is only $5000 per year.  Personally I would like to deposit more, but seeing as how there isn’t much I can do about this I’ll take what I’m given. In the future the maximum deposit will most likely be increased to compensate for inflation.

Now as for the bank itself, ICICI Bank Canada, I’ve been their customer ever since they launched on the Canadian financial scene, and so far I haven’t had any problems with them. The only negative point for some may be the fact that if you call their support line you’re goint to be speaking with an Indian support representative who may have bad English skills or a hard to understand accent. Keep in mind that ICICI Bank Canada is the Canadian branch of the second largest bank in India. So if you’re like me and you don’t call very often ICICI Bank Canada should suit you well.

To open a TFSA with ICICI Bank Canada (or to get more details) see the link below:

http://www.icicibank.ca/personal/Investments/tfsa.html

That’s all for now.

Cheers.
Alan
http://alansmoneyblog.com

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