Bank of Canada Update: Top TFSA Investments to Consider Now
Recent announcements from the Bank of Canada have raised interesting considerations for investors, particularly those looking at Tax-Free Savings Accounts (TFSAs). On January 28, 2026, the Bank maintained its policy rate at 2.25%, with a Bank Rate of 2.5% and a deposit rate of 2.20%. This stability signals an environment where investors might shift their focus toward companies capable of consistent growth, despite economic fluctuations.
Top TFSA Investments to Consider
This environment leads us to two notable Canadian companies: Royal Bank of Canada (RBC) and Waste Connections (WCN). Both exhibit characteristics attractive for TFSA investors seeking steady growth and income.
Royal Bank of Canada (RY)
- Performance: RBC’s stock has surged approximately 38% over the past year.
- Revenue Diversification: The bank operates across Canadian personal and commercial banking, wealth management, and capital markets.
- Financial Highlights:
- Fiscal 2025 net income: $20.4 billion.
- Diluted earnings per share (EPS): $14.07, a 25% increase year-over-year.
- Fourth-quarter adjusted net income: $5.6 billion, or $3.85 per share.
- Valuation: The stock is priced at 16.6 times earnings with a dividend yield of 2.8%.
- Risk Considerations: Despite stable rates, it’s crucial to monitor credit losses and household financial stress.
Waste Connections (WCN)
- Business Model: WCN operates in waste collection, landfill management, and recycling across Canada and the U.S.
- Stability: Customers typically do not cancel services, allowing the company to raise prices judiciously.
- Dividend Growth: In October 2025, the company increased its quarterly dividend by 11.1% to US$0.35 per share.
- Financial Highlights:
- Third-quarter revenue: Approximately $2.5 billion.
- Net income: About $286 million.
- Diluted EPS: $1.11.
- Valuation: The stock trades at 70 times earnings with a 0.87% dividend yield.
Investment Summary
Both RBC and WCN present compelling cases for TFSA investments following the Bank of Canada’s recent rate announcement. These companies offer the potential for robust compounding rather than volatility-driven returns.
Investment Calculator
| Company | Recent Price | Number of Shares | Annual Dividend | Annual Total Payout | Frequency | Total Investment |
|---|---|---|---|---|---|---|
| WCN | $231.61 | 130 | $1.97 | $59.10 | Quarterly | $6,948.30 |
| RY | $233.58 | 29 | $6.56 | $190.24 | Quarterly | $6,773.82 |
With a focused approach and the ability to ride out market noise, investors can find value in both companies for a well-rounded TFSA strategy in today’s economic landscape.
