TFSA vs Savings Account

A Tax-Free Savings Account (TFSA) and a regular savings account can both help you save, but they work very differently.

The big difference:

• A TFSA is a registered account where your investment growth and withdrawals are generally tax-free.

• A savings account is a regular account where you earn interest, but that interest can be taxable.

Both can be useful—it just depends on your goals and time horizon.

KOHO High Interest Savings

Even if you’re using a TFSA for long term goals, you still need a place for flexible, easy access cash.

With KOHO High Interest Savings, you can:

• Earn a high interest rate on money you don’t want locked in

• Keep funds accessible through the app

• Use it alongside a TFSA, for things like an emergency fund or short term goals

What is a TFSA?

A TFSA is a registered account that lets your money grow tax-free:

• You get a certain amount of contribution room each year

• You can hold different types of assets (like cash, GICs, or investments) inside it

• Withdrawals are generally not taxed, and the amount you take out is added back to your contribution room the following year

Because of the tax benefits, TFSAs are often used for medium- to long-term goals.

What is a Regular Savings Account?

A savings account is a straightforward place to store cash and earn interest:

• Your money stays liquid and easy to access

• Interest is usually taxable as regular income

• It’s ideal for short term goals or money you might need on short notice

TFSA vs Savings Account: Which Should You Use?

You don’t have to choose just one—many people use both:

A TFSA may be better if you:

• Are saving for medium or long-term goals

• Want to maximize tax-free growth

• Can leave the money alone for a while

A high interest savings account may be better if you:

• Need quick access to your money

• Are building an emergency fund

• Are saving for short-term goals like travel, repairs, or upcoming expenses

Think of a TFSA as your tax-free growth tool, and a high interest savings account as your flexible cash parking spot.