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Tax season is upon us and with it, the associated tax stress. If you haven’t already done your tax return, then it’s time to start thinking about it. The deadline to file your taxes for the 2018 calendar year is April 30, 2019, or June 15, 2019 for those who are self-employed. All Canadian citizens, or those living and working in Canada, need to file a tax return if you owe taxes, want to claim a refund, have been asked to file by the CRA, or want to receive any federal or provincial payment benefits such as GST/HST or the Canada Child Benefit.

Technology is making filing for your tax returns easier than ever. With income tax preparation software, free online tax calculators, and electronic filing, completing your 2019 tax return shouldn’t be a hassle.

Tax options for 2019

There are several options for doing and submitting your taxes in 2019. Some of the most common methods for doing taxes are:

• Using tax professional company (averaging $130 with H&R Block)
• Using an accountant or CPA (usually costing more than a “tax professional”)
• Having a knowledgeable friend or family member do them for you (free or paid)
• Doing them yourself, with or without income tax software ($0+)

Additionally, there are some free local programs to help certain Canadian citizens file their taxes. These include:

• Tax clinics for those with a modest income and straightforward tax return. Tax clinics are held across Canada, though you are required to register in advance.
• File my Return, which started in 2018 and is back again for 2019. This is a free phone service aimed at helping eligible individuals with low or fixed income.

Why you should consider income tax software in 2019

Income tax software is becoming increasingly popular here in Canada. The step-by-step programs tell you exactly what you need to have and what information to put where.

They’re quick, easy, safe, efficient, and affordable — especially if you choose free software.

So, what’s the difference between paid software and free income tax software? At first thought, you may assume that the paid version has to be better — but that’s not necessarily the case. Paid versions usually offer more support such as expert review and audit protection, however those aren’t necessarily things you need, especially if your taxes are straightforward. At the end of the day, as long as your software is certified by the CRA then you can be sure that it’s secure and worthwhile. If you can save yourself some money by taking advantage of the free income tax software, then you may as well.

Free income tax software options available to Canadians in 2019

When it comes to free income tax software options in Canada there are many to choose from. With more than 90% of Canadians filing online, you might want to focus on software that is NETFILE-certified by the Canadian government.

There are two main reasons why you want to choose a NETFILE program. The first, and most obvious, is because it’s much easier and faster. NETFILE allows you to file electronically while non-NETFILE compatible programs mean you need to mail everything in. The second reason as to why NETFILE is so advantageous is that it allows you to take advantage of the Auto-fill my return feature. This program takes information that the CRA already has on file for you such as your employment income and investment income, and automatically adds it to your current return. While this isn’t necessary, it definitely makes the process faster and easier.

There are a number of free, certified NETFILE compatible software options; here are a few of them:

SimpleTax is completely free with no paid add-ons. It lets you “Pay What You Want” with $0 as one of the options.

Features include auto-filing and express notice of assessment (NOA), as well as a tutorial mode which allows users to figure out which forms apply to their needs. SimpleTax runs in your browser or through an iOS app.

StudioTax is also completely free and can be used for any type of return. Unlike other income tax software programs, StudioTax is a downloadable program which some people prefer because it means your information isn’t stored on a third-party site. StudioTax is compatible with Windows and Mac.

TurboTax is a free option with tiered paid options for more complicated returns. Additionally, you can pay extra for an expert review or audit protection. TurboTax is compatible with Windows and Mac, as well as Android and iOS.

H&R Block offers free tax software with paid add-ons for technical support, the ability to review your full T1 General before you file, and more. The H&R Block online tax software is accessed through your browser.

Remember, while it is currently 2019 you are filing your 2018 taxes, so the programs you use will be for 2018 (the tax year you are filing for); there won’t be a StudioTax 2019 until next year!

Final word

Doing your taxes is never fun, but it doesn’t have to be stressful and expensive. This year, consider taking advantage of one of the free income tax software programs for 2019. They just might be the answer you have been looking for to save you both time and money.

Take our 2019 Canadian personal income tax filing survey for a chance to win $50!

Do you use free income tax software? Please share your experience and recommendations in our forum.

Meridian Credit Union’s TFSA and RRSP transfer-in promo

Until March 1, if you transfer at least $10,000 of TFSA or RRSP funds to Meridian Credit Union, you will receive a 1% transfer bonus of up to $750. This can be combined with its 3.25% promotional interest rate on TFSA and RRSP savings accounts for 4 months (falling back to a 1.50% regular rate thereafter), and its 3.45% promotional 3-year GIC rate.

Steady leading rates

Motive Financial remains the leader on our savings account chart at 2.80%, and Ideal Savings leads the TFSA list at 2.76%. They’ve both kept those rates for a few months now.

Since Motive Financial shot to the top of our chart in November with its 2.80% savings account interest rate, and made its TFSA rate more competitive at 2.40%, we’ve seen quite a drop in its GIC rates. Tangerine Bank has also dropped its non-registered GIC rates recently, although its TFSA and RRSP GICs have stayed a bit higher. The current leaders on our GIC chart are:

• 1-year: 3.11% at Ideal Savings
• 2-year: 3.30% at Achieva Financial, EQ Bank, Implicity Financial, and Oaken Financial
• 3-year: 3.45% at Meridian Credit Union
• 4-year: 3.55% at Hubert Financial
• 5-year: 3.60% at Oaken Financial

Big bank savings account promos

The “big banks” usually offer some of the worst savings account interest rates in Canada, but we’ve seen a couple of notable promos to start the year: a targeted promo from BMO for 3.25% until April 30 on a new Smart Saver Account, and a targeted promo from RBC for 3.00% until April 30 on new deposits to a High Interest eSavings Account.

motusbank, coming spring 2019

Meridian Credit Union’s online bank venture “motusbank” is launching some time in spring 2019, and forum members are beginning to speculate about how it will differentiate itself. motusbank has so far said that it will offer a no-fee chequing account, a high interest savings account, loans, lines of credit, investments, and mortgages, with its website claiming “an incredibly low mortgage rate”. We’ll be watching closely as its launch approaches!

More cash back offers

Last month, we launched High Interest Savings Accounts Cash Back, including a $40 offer from EQ Bank. We recently added a few offers from Tangerine: $25 for opening a chequing or savings account, and $30 for opening its Money-Back Credit Card.

Other reads

• Looking for the best USD GIC rates at RBC, TD, Scotiabank, and Tangerine, including a new immigrant’s experience with financial advisors
• RRSP or TFSA? Here’s how to know which plan makes the most sense for you this year
• How finances play into Canadians’ happiness
• Some Ontario-only GIC promos: DUCA Credit Union is advertising 3.75% for a 5-year GIC, which beats all other rates on our GIC chart; Omnia Direct is advertising 3.35% for a 3-year GIC, which would tie for second for 3-year rates on our GIC chart. See our promos page for a few additional GIC rates.

2019 rates are up from last year

Today, the Bank of Canada decided to keep its key interest rate the same. In its statement, it revised the real GDP outlook down slightly from the last update. However, 2018 saw interest rates and savings account rates continue to rise modestly and steadily, and every financial institution on our chart begins 2019 with rates higher than at the start of 2018, with the exception of Canadian Tire Financial. Motive Financial has the top savings account interest rate at 2.80%, and Ideal Savings leads for a TFSA at 2.76%.

The highest advertised, non-promo 5-year rate on our GIC chart is 3.60% (shared by EQ Bank and Oaken Financial), whereas last January it was Oaken Financial at the top with 3.15%.

More TFSA contribution room

As we welcome 2019, remember also that adults 18 years of age and older get another $6,000 of TFSA contribution room, as well as any unused contribution room and withdrawn amounts from 2018. In addition to regular rates, there are quite a few TFSA-eligible promotions such as Ontario-only Ganaraska Credit Union’s 4.00% 4-year GIC promo and Ideal Savings’ 3.25% 150-day GIC promo.

The targeted Tangerine Bank Winter 2019 promotion on new deposits, including to TFSAs, has arrived, so if you are a current customer, check your e-mail or online account for what has been reported as a 3.00% rate.

There are also TFSA-specific short-term promos (from 2.5 to 4 months) such as at BMO (3.25%), CIBC (3.00%), and Meridian Credit Union (3.25%). Be sure to do the math, though, and factor in normal rates after the promo expires as well as TFSA transfer out fees. If you intend to leave your money deposited past the promo period, you might be better off with a financial institution that has a non-promotional rate that works out higher in the long run.

Hubert Financial rate is back up

After decreasing its regular savings account interest rate from 2.50% to 2.30% on December 5, Hubert Financial brought the rate back to 2.50% less than 3 weeks later on December 22. That makes Hubert Financial tied with Bridgewater Bank on our chart for the third highest rate for regular savings accounts, and the second highest TFSA rate.

In other news, last month Alterna Bank increased its regular savings account and TFSA interest rates from 2.25% to 2.35%.

Personal finance cash back

High Interest Savings Accounts Cash Back is now live! High Interest Savings has partnered with several financial institutions to get you money back (via e-mail money transfer) for opening an account with them. Get $40 back for opening an EQ Bank account, $60 back for a Scotiabank credit card, or $5 to check your credit score with Borrowell. You can use your normal High Interest Savings forum account to access the offers.

Bridgewater, Motive, Oaken, Wealth One play catch-up; Hubert Financial rate decrease

On December 5th, Hubert Financial somewhat surprisingly decreased its regular savings account interest rate from 2.50% to 2.30%, which is even lower than its 2.35% rate from August. Its TFSA (and RRSP and RRIF) interest rate remains at 2.50%.

The rest of the rate changes have been positive, mostly from financial institutions playing rate catch up after the flurry of increases over the past few months. Bridgewater Bank increased its regular savings account interest rate to 2.50%; it had been at 1.75% since January 2016. Oaken Financial made a similarly large jump to its regular savings account interest rate, from 1.50% to 2.30%. Also seeing an increase was Wealth One Bank of Canada’s TFSA to 2.30%, matching its regular savings account rate; and Motive Financial’s TFSA to 2.40%, which had been at 1.80% since October 2015.

Motive Financial remains the regular savings leader at 2.80%, and Ideal Savings remains the TFSA leader at 2.76% on our comparison chart.

For a bit more insight into Motive Financial, see this detailed review of the account opening process by forum member Alexandre, who chronicled the 15-day process from application submission to account creation.

Promotions and multi-year GIC strategies

• Ideal Savings currently has a 150-day GIC promo at 3.25%, which is higher than any regular 1-year GIC rate on our chart
• Ontario-only Ganaraska credit union has a 4-year GIC at 4.00%, with a 1.25% cashable rate. As pointed out by forum user “thisusernameforlease”, if you’re concerned that you might need some money from a GIC before it matures, simply open multiple GICs for the same term. For example, open 5 x $1,000 4-year GICs rather than 1 x $5,000 4-year GIC. Combine this with a GIC ladder (multiple GICs of different terms that mature in staggered increments such as every year) for maximum GIC liquidity!
• Canadian Tire Financial has dropped near the bottom of our comparison charts over the past few years, but if you’re a current customer, look for a targeted promotion for 3.20% on new deposits to a High Interest Savings account between December 10, 2018 and June 30, 2019

2019 TFSA contribution limit

As 2018 comes to an end, you might be starting to calculate taxes and rounding out charitable donations, as well as looking ahead to 2019’s TFSA contribution limit. The 2019 limit will officially increase another $500 to $6,000, making a cumulative total of $63,500 for those who were at least 18 years old when the TFSA was introduced in 2009.

Remember that any amount withdrawn from your TFSA is re-added to your outstanding contribution room the next calendar year. If you’re considering transferring existing TFSA funds between financial institutions, this makes the end of 2018 a good time to withdraw money to be re-deposited in January, so that you don’t have to go through the administrative process of a direct transfer, which might include transfer out fees.

Motive Financial introduces 2.80% savings account

This month, Motive Financial quietly introduced new savings and chequing accounts. The Motive Savvy Savings Account currently has a market-leading 2.80% interest rate, topping the Ideal Savings 2.76% rate. The Motive Savvy Savings Account has only 2 free external transactions per month, then charges $5 per transaction. However, transfers between internal accounts are free, so you can pair it with a Motive chequing account and not have to worry about the transaction limit.

The new Motive Cha-Ching Chequing Account looks to be the same as the existing no-fee chequing account that Motive offers, except that it now has unlimited Interac e-Transfers.

It is a bit odd that Motive introduced these new account types rather than modifying its existing accounts. The Motive Savings Account has been stuck at 1.50% since July 17, 2015, and its TFSA is still sitting at 1.80%, even though the Bank of Canada’s key interest rate has gone up 5 times starting in 2017. But the bottom line is that these new accounts are attractive in rate and features!

Savings account interest rate increases and competition

On October 24, 2018, the Bank of Canada raised its key interest rate by 0.25% to 1.75%, and signaled that more hikes are expected. In response, many financial institutions increased their regular savings and TFSA interest rates, including MAXA Financial (to 2.45%), Outlook Financial (to 2.40%), Achieva Financial (to 2.40%), Implicity Financial (to 2.40%), Hubert Financial (to 2.50%), AcceleRate Financial (to 2.40%), and Peoples Trust (regular savings account to 1.65%).

In the case of Achieva Financial, it had initially increased its rates from 2.15% to 2.30%, then to 2.40% a few hours later that same day. Implicity Financial did something similar, initially increasing its rates from 2.15% to 2.35%, then to 2.40% the next day. Looks like healthy competition worked in favour of Canadian savers!

The savers account leader is currently Motive Financial at 2.80%, followed by Ideal Savings at 2.76%, Hubert Financial at 2.50%, MAXA Financial at 2.45%, and a 4-way tie at 2.40%. The leaders are the same on the TFSA side except for Motive Financial, which is not amongst the top rates.

Get 3.00%+ savings account interest rates with promotions

There are quite a few current savings account promos that will get you 3.00% or higher. Here are some of the newest ones:

• CIBC eAdvantage Savings Account net new deposits promo: 3.00% between October 16, 2018 and March 31, 2019
• Tangerine Bank’s latest new customer promo: 3.00% savings account interest rate until April 30, 2019
• Simplii Financial: 3.15% on new deposits in a savings account between November 1, 2018 and February 28, 2019 (fodder for negotiation with Tangerine Bank)

GIC options: Tangerine Bank and Simplii Financial become competitive

Tangerine Bank and Simplii Financial have kept most of their rate changes in lock-step over the years, including their currently uncompetitive standard 1.25% savings account interest rate and their penchant for promotional rates for new accounts and new deposits.

At the beginning of November, Tangerine Bank increased its GIC rates to be close to the top of our GIC comparison chart, including the highest nationally-available, non-promotional 1-year GIC rate at 3.10%. A couple of days later, Simplii Financial increased its GIC rates across the board by up to 0.40%, matching Tangerine’s rates.

Some of the newest GIC promos include the following:

• EQ Bank: 3.33% for a 3-month GIC
• DUCA Credit Union: 3.00% for a 1-year GIC or 3.25% for a 3-year GIC redeemable after each year
• First Ontario Credit Union (Ontario only): 9-month GIC at 3.25% (new money only); 5-year GIC at 3.75%
• WFCU Credit Union and Omnia Direct (Ontario only): 3.40% for a 1-year GIC

Goodbye Zag Bank

Zag Bank, a virtual bank owned by Desjardins, had not offered competitive rates for quite a while. It recently announced that it is shutting down, mostly before the end of 2018. A silver lining is that it paid out a $25 goodwill bonus to existing customers.

Hello federal credit union Coast Capital Savings

Coast Capital Savings, formerly a BC credit union, became a federal credit union (although not available in Quebec yet) on November 1, 2018. Its launch promos include 2.70% for a convertible 16-month GIC, and a 2.00%/3.00%/4.00% 3-year escalator GIC.

Simplii Financial’s new no-fee cash back credit card

Simplii Financial has come out with a no-fee cash back credit card that is only available to current Simplii Financial clients for now. In short, it is a Visa without an annual fee and offers 4% back at restaurants; 1.5% at gas, grocery stores, and recurring payments; and 0.5% on everything else. You can get 10% cash back (up to $50 back) on your first 4 months of spending at restaurants. Forum member “User230” has done a comparison of the new Simplii credit card against several other cards.

One comparable current credit card offer is for the Scotiabank Momentum Visa Infinite, which has a $99 annual fee waived for the first year, gives 4% back at gas and grocery purchases, 2% back at drug stores and recurring bill payments, and 1% back on everything else. You can get 10% back on all purchases (up to $200 back) for the first 3 months.