More and more Canadians are opening up tax-free savings accounts (TFSA), according to Toronto-based Bank of Montreal (BMO). However, advisors still have work to do when it comes to getting clients to invest for the long term in those savings vehicles.

BMO’s annual TFSA report shows that 48% of Canadians now have a TFSA, an increase of 23% from 2012. One reason for the growing interest in TFSAs, according to Larry Moser, regional sales manager, BMO Financial Group, in Ottawa, is the significant contribution room now available to holders.

When the TFSAs were first introduced $5,000 didn’t seem like a lot of money to worry about, says Moser, but now that people have up to $31,000 in contribution room ($62,000 if they have a spouse) a TFSA seems like a good idea. Says Moser: “People are paying more attention to TFSAs.”

Yet Canadians are not necessarily making the most of their newly opened accounts. According to the report, only 11% of survey respondents could identify eligible investments for a TFSA and only 19% knew the contribution limit.

Furthermore, cash was the most common form of holding in TFSAs with 57% of respondents saying they held it in their accounts. Comparatively, 25% of TFSA holders said they invested in mutual funds and 23% said they owned guaranteed investment certificates (GIC).

“We need to sharpen up our math skills to show clients just exactly how much more money they will make if they invest in a longer-term portfolio,” says Moser, “rather than just leaving it in cash. “

For example, a 25-year-old client who opens a TFSA and contributes the maximum allotment each year will have roughly $215,000 at retirement. If the client invests the money in a low-interest, cash-type product their account would grow to a little under $300,000, says Moser. However, if invested in a balanced portfolio with a return of 5% that account is likely to grow to almost $750,000.

“When you can grow money from $215,000 to $750,000 and at the end of the day it’s all tax free,” he says, “that is quite the nest egg you’ve built for your client.”

Looking across the country, western Canada has a far greater interest in TFSAs than the east coast. According to BMO, 55% of Albertans hold a TFSA followed by 53% of people living in the Prairies and British Columbia. Only 34% of Maritimers, however, hold a TFSA.

Results for the study were compiled from 1,023 online surveys conducted by Pollara between November 29,, 2013 and December 5, 2013.