A Tax-Free Savings Account (TFSA) is a personal savings account that can be used to save for any goal. After-tax money can go into a TFSA, but your investments grow tax-free and you won’t pay any tax on withdrawal.
Who should invest in a TFSA?
- Canadians who have reached the age of majority
- Great for short term, medium-term, and long-term savings
- Best suited for low to medium-income earners or as a complement to an RRSP
Benefits include:
Earn investment income, tax-free – Interest, capital gains, dividends you earn in the account are not subject to tax
Flexibility to withdraw from TFSA – Withdrawals are tax-free and can be at any time, for any purpose that you choose
Flexible savings plan – Any unused contribution room in TFSA can be carried forward. Any withdrawals from a TFSA in one year, can be recontributed in the next calendar year
Government benefits stay the same – Withdrawing from a TFSA and receiving any amount will not affect the government benefits you get (ex. Child tax benefit, GIS, etc.). Current contribution limit per year is $7,000 as of 2024 and $95,000 if at least 18 years old in 2009 and never contributed to a TFSA.
Let me help you make the best choices based on your needs and your situation.