While most Canadians are not yet taking advantage of Tax-Free Savings Accounts, more are expecting to before year-end and even more intend to invest in 2010, according to a new survey conducted for online bank ING Direct.

Although only 34% of Canadians have set up a TSFA since the federal government launched the accounts in January 2009, another 11% of Canadians say they intend to open a TFSA before year-end, while even more Canadians (49%) expect to contribute to a TFSA in 2010.

“At ING Direct, we encourage Canadians to save their money and we think Tax-Free Savings Accounts are a great way to do that,” says Peter Aceto, president & CEO of ING Direct.

According to the survey, most Canadians who have opened a TFSA are saving the maximum allowed. Forty-three per cent contributed between $4,001 and the $5,000 maximum allowed for the year, indicating that those who are saving tax-free, are saving as much as possible.

The survey found that 18% of respondents have opened a TFSA with ING Direct, followed by the ‘big 5’: TD Bank Financial Group, 11%; Bank of Montreal, 9%; Royal Bank of Canada, 8%; CIBC, 3%; and Bank of Nova Scotia, 3%.

Nearly half of Canadians (49%) report they will contribute to a TFSA in 2010. Of those intending to contribute to TFSAs in 2010, 63% say they plan to take advantage of the TFSA as soon as possible for 2010 to maximize their tax savings (31% were unsure, 6% said no).

ING Direct has introduced a way for Canadians to kick start their 2010 tax-free savings right now.

While the the federal government doesn’t allow 2010 TFSA contributions until Jan. 1, 2010, ING Direct is again offering a way to help new and existing clients save their money faster, by creating the 2010 TFSA Kick Start Account. Canadians can make next year’s contribution today and start earning interest right now. While this account is not an official TFSA yet, it will essentially act as one by paying double interest until Dec. 31, 2009 to cover any taxes that may be owing on the interest earned in this account.

On Dec. 31, 2009, clients will receive a bonus equal to the interest their account earns between October 1 and Dec. 31, 2009. That 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 2010 TFSA Kick Start Account is $5,000.

On January 1, 2010, the money in a client’s 2010 TFSA Kick Start Account will be transferred to an official Tax-Free Investment Savings Account where it will grow tax-free.

The survey results were complied from an online poll of nearly 1,000 Canadians conducted by Angus Reid Strategies for ING Direct Canada from September 23 to 24. The results have been statistically weighted according to the most current education, age, gender and region Census data to ensure a sample representative of the entire population of adults 18+ years of age in Canada.

IE