TFSA (Tax Free Savings Account)
A Tax-Free Savings Account (TFSA) is a registered account with specific tax advantages:
The Features of a TFSA Include:
- Helps you save - For short or long-term goals
- Tax-free – Investment income and capital gains earned in a TFSA are not taxed, even when you withdraw money from the account. This makes investments with higher returns more attractive.
- What investments are eligible? – A TFSA can hold a combination of eligible investments, such as stocks, bonds, managed portfolios, mutual funds, Guaranteed Investment Certificates (GICs) and cash.
- How much can I contribute annually? – Your maximum contribution amount is $5,500 annually.
- How much can I contribute from past unused room? – You can carry forward the unused contribution amount to future years.
- Does it affect my government benefits? – Income earned and withdrawals made from a TFSA do not affect your eligibility for federal tax credits or income-tested benefits such as the Canada Child Tax Benefit, Old Age Security (OAS) or the Guaranteed Income Supplement (GIS).
- Beneficiary considerations – You can set up the account’s assets to transfer directly to your spouse or common law partner upon your death, as long as he or she is named beneficiary on your TFSA.
- Information on TFSAs from the CRA website
- Ask us today about rates!