If you have a brokerage charging a 1% fee on your TFSA, that applies to everything including your capital, dividends, capital gains and interest income. It's not an argument that applies to the topic here. More importantly, why are you paying this 1% fee at all? Even my kids' TFSA accounts with two different discount brokerages don't charge them anything besides the usual $9.99 trading fees and they offer synthetic DRIPs for free. There may be charges up to a certain account size that I'm not aware of but I suspect you may be referring to a "full-service" broker and if that's who you're comfortable with then that's your choice. There are however, better options.