The Bank of Canada Just Spoke: Here’s What I’d Buy in a TFSA Now

The Bank of Canada just spoke, and it kept things steady as she goes. On Jan. 28, 2026, it held the policy rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. It also flagged trade-policy uncertainty as a key risk and expects inflation to stay close to 2%.

For Tax-Free Savings Account (TFSA) investors, that kind of pause lowers the urge to trade every headline and shifts attention back to businesses that can grow earnings through ordinary days. So let’s look at two to consider.

RY

Royal Bank of Canada (TSX:RY) fits this rate backdrop as it earns from more than one engine. It runs Canadian personal and commercial banking, wealth management, and a large capital markets arm, so it can collect fees and lending spreads even when growth cools. The stock has also delivered strong performance, with shares up about 38% in the last year alone. A steady Bank of Canada helps because it supports confidence, credit demand, and capital markets activity without forcing a sudden reset.

RBC also spent the last year proving it can navigate shifting rules while still growing. In April 2025, it stepped back from certain sustainable finance goals after Competition Act changes tightened standards around environmental claims. Big banks live under a microscope, and disclosure rules can reshape narratives fast. Then in December 2025, strong capital markets and wealth results helped RBC beat profit estimates, helped by stronger trading and a busier deal environment. That mix of resilience and upside explains why this name often lands on TFSA shortlists when rate uncertainty fades.

The earnings numbers make the case feel practical instead of poetic. RBC reported fiscal 2025 net income of $20.4 billion and diluted earnings per share (EPS) of $14.07, both up 25% year over year, and it posted a CET1 ratio of 13.5%. It also reported fourth-quarter adjusted net income of $5.6 billion, or $3.85 per share, while provisions for credit losses reached about $1 billion. That credit line stays worth watching in 2026, even with stable rates, because household stress can still creep in. Meanwhile, the stock trades at just 16.6 times earnings with a 2.8% dividend yield, which still looks reasonable for a Canadian blue chip.

WCN

Waste Connections (TSX:WCN) collects waste, runs landfills, and processes recycling across Canada and the United States. Customers rarely cancel, and the company can often raise prices while improving route density and margins. That matters when the Bank of Canada pauses rate changes, as investors start favouring businesses that can grow without perfect economic conditions.

Over the last year, Waste Connections also signalled confidence through capital returns. In October 2025, it approved an 11.1% increase in its quarterly dividend to US$0.35 per share. That kind of raise usually tracks cash comfort, and it suggests management expects durability into 2026. The company also keeps using tuck-in acquisitions to deepen its network, which can support margins when done with discipline. The risks never disappear, though. Environmental rules can tighten, landfill permitting can slow, and labour or fuel costs can jump.

The latest earnings snapshot shows why investors often treat this stock like a defensive compounder, with one big caveat: price. For the third quarter of 2025, filings showed revenue of about $2.5 billion, net income of about $286 million, and diluted EPS of $1.11. For the first nine months of 2025, operating cash flow reached roughly $1.9 billion, which helps fund capex, acquisitions, and dividends without relying on cheap financing. The caveat sits in valuation. The stock trades at 70 times earnings with a 0.87 yield.

Bottom line

Could these be TFSA buys right after the Bank of Canada held steady? They could, if you want sturdy compounding instead of thrills. In fact, you could still create steady income from $7,000 in each stock.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTWCN$231.6130$1.97$59.10Quarterly$6,948.30RY$233.5829$6.56$190.24Quarterly$6,773.82

If you can hold through noise and reinvest distributions, both can suit a TFSA built for the real world.

The post The Bank of Canada Just Spoke: Here’s What I’d Buy in a TFSA Now appeared first on The Motley Fool Canada.

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More reading

• TFSA: 3 Canadian Stocks That Are Perfection With a $7,000 TFSA Investment
• 5 Canadian Stocks to Watch as January Sets the Tone for 2026
• 5 Stocks to Hold for the Next Decade
• 3 Canadian Stocks That Are the Best Buy and Holds in a TFSA
• Outlook for Royal Bank of Canada Stock in 2026

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.