Canadians’ appetite for Tax-Free Savings Accounts (TFSA) does not seem to be increasing despite the opportunity this investment offers to help them build their retirement savings.

While one-third of Canadians have contributed to a TFSA since its introduction almost two years ago, according to a recent nationwide poll conducted by Angus Reid Public Opinion on behalf of online bank ING Direct, 53% don’t have a TFSA and 14% are unaware of the tax saving vehicle.

More concerning is that of those who do not currently have a TFSA, half (52%) of them don’t plan to open one during the remainder of this year or next year.

ING Direct is encouraging Canadians to consider the significance TFSA’s can have on an investment portfolio by paying double interest on its 2011 TFSA Kick Start Account between October 1 and December 31, as a reward for planning ahead to save tax-free.

“The ability to save tax-free is one of the most significant vehicles Canadians have been given to build their investment portfolios,” says Peter Aceto, president and CEO of ING Direct. “We are thrilled to give Canadians the chance to invest early again this year and hope our campaign demonstrates how people can make the most out of tax-free saving over the long term. The earlier in the year contributions are made, the more beneficial tax-free saving can be. Canadians owe it to themselves to find a way to incorporate TFSA’s into their investing.”

How the 2011 TFSA Kick Start Account works

On Dec. 31, 2010, clients will receive a bonus equal to the interest their account earns between Oct. 1 and Dec. 31, 2010. (Current rate is 1.50%) This should more than cover the income taxes a client may have to pay during this period for this account. The maximum contribution amount for this 2011 TFSA Kick Start Account is $5,000.

On January 1, 2011, the money in a client’s 2011 TFSA Kick Start Account will be transferred to an official Tax-Free Investment Savings Account where it will grow tax-free.

IE