TFSA
What is TFSA?
A Tax-Free Savings Account (TFSA) in Canada lets you save and invest money in a variety of investment options. You’ll enjoy tax-free contributions, growth, and withdrawals, making it a flexible and powerful tool for you to achieve your investing and savings aspirations.
Why open a TFSA?
Tax-Free Growth
Investments in a TFSA grow without incurring taxes on your earnings, contributions, or withdrawals, allowing you to maximize returns and save for short and long term goals.
Flexibility
You can withdraw funds anytime without penalties or taxes. This makes it easy to access your money whenever you need.
Variety of Investments
Beyond being a place to put your savings, a TFSA provides various investment selections. This includes stocks, bonds, GICs, mutual funds, and more.
How does TFSA work?
A TFSA allows Canadians to grow savings and investments tax-free. Contributions are capped annually, with a 2024 limit of $7,000.
Unused contribution room from previous years accumulates and carries forward. This begins when you turn 18, even without an account opened.
Who can open one?
Canadian residents with a Social Insurance Number (SIN) who are at least 18 years of age.
Depending on the province, you may have to wait until 19 years of age to begin certain investments.
Tax Treatment
Tax-Free?
Tax-Deductible?
Tax-Deferred?
Numbers to Know
FHSA vs RRSP vs TFSA
FHSA | RRSP | TFSA | |
|---|---|---|---|
Contributions can be deducted from income | |||
Withdrawals DO NOT have to be paid back into account |
Note: while you may open multiple TFSA accounts, the contribution room remains constant amongst all accounts. Penalties may arise for over-contribution.
You can invest your contributions in a variety of investment vehicles and withdraw at any time free of tax.
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