Good stocks are like your default favourite food items that you revert to when you can’t make up your mind about something new. They are typically steady stocks offering predictable returns (via dividends or consistent growth), but more importantly, they are businesses you might understand well.

For many Canadian investors looking for healthy dividends, bank stocks are among the default options. The stocks are safe, the business model is conservative, and the dividend histories are stellar for all of the Big Six.

The banking giants also offer decent capital appreciation potential. Of three out of the six bank stocks that investors may choose for a good mix of growth and dividends is Toronto Dominion (TSX:TD).

There are several reasons why the bank is a good buy in almost any given year, and 2023 is no exception.

The bank

Toronto Dominion is one of the oldest banking institutions in Canada, and one of the two banks (Bank of Toronto) that merged to form TD, established in 1855. That’s a long time to build trust in the communities it operates in.

The bank rose to become the second-largest bank in Canada by market cap, the sixth-largest North American bank by assets, and the top Canadian bank by assets and total deposits, as per the Q4 2022 report.

This endorses, not just the status of leadership in the banking sector but the scope of it as well. As the largest banking institution in the country in several retail banking categories, it’s incredibly stable and resilient against market headwinds.

Another feather in its cap is its impressive American presence. TD is the largest Canadian bank operating in the US and in the last quarter, 31% of its revenues were generated from US retail clients, compared to 42% from Canadian retail. The bank is also rapidly growing its digital presence in the US and Canada.

Foolish takeaway

As one of the top blue-chip stocks currently trading on the TSX that offer reliable and relatively predictable long-term returns, the bank is a good pick for both your TFSA and RRSP portfolios. You can buy and forget it in your RRSP and use it to generate a passive income from your TFSA.

Should You Invest $1,000 In TD Bank?

Before you consider TD Bank, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in January 2023… and TD Bank wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 16 percentage points. And right now, they think there are 5 stocks that are better buys.