Tax-Free Savings Account
Tax-Free Savings Accounts (TFSA) are investment accounts that allow Canadians to set aside money tax-free.
With a TFSA, you can deposit funds then watch those funds earn interest tax-free throughout your lifetime. Contributions to TFSAs are not tax deductible and any money contributed, as well as any income earned in the account, is tax-free for life, even when it is withdrawn. Income earned in the account includes interest, dividends, and capital gain.
The Government of Canada imposes limits on TFSA contributions. In 2018, the limit is $5500 but as of January 1st, 2019 the limit has been raised to $6000.
The ability to withdraw funds as needed is one of the biggest advantages of a TFSA. Withdrawing money from your TFSA doesn’t count as “income” so it doesn’t affect your annual taxes or other benefits and pensions. So yes – you can withdraw from your TFSA at any time but it’s far more beneficial to let interest build by saving long term.
Our advisors are committed to developing flexible investment solutions to suit your needs. Visit your local branch to learn more about the best registered investment product for you.