Keep more of your money in your pocket.
If you do not have a Tax-Free Savings Account (TFSA), you may be missing one of the most important personal savings vehicles for Canadians.
A TFSA is an account that helps you set aside money for short and long term financial goals. Just like its name, it helps you save money, tax free – for as long as you choose.
Canadian residents age 18 (or age 19 in some provinces) or older can open a TFSA. Any capital gains or income earned in the account is typically tax-free even when money is withdrawn.
To learn more about TFSAs, visit cra-arc.gc.ca/tfsa.
TFSA fast facts
- Almost 17 million Canadians had opened TFSAs by 2016, with $194-billion in assets.
(Canada Revenue Agency)
- The average TFSA was worth $17,328 in 2016.
(2017 BMO survey)
- If you have been eligible every year since 2009 and have never contributed, your total TFSA contribution limit is $63,500.
- TFSAs can hold many types of assets – cash, stocks, bonds, mutual funds and more. And, they can grow tax free for life. This means that any interest, dividends and capital gains earned in your TFSA are never taxed – even when withdrawn.
- Your TFSA savings can be withdrawn at any time, and for any reason. TFSAs are useful for saving for things you want to buy in the short term – a car, for example, or a vacation. Alternatively, it can be used for longer term goals, such as saving for retirement.
- As of January 1, 2020 you can contribute up to $6,000 annually to your TFSA.
- Unused contributions – You can carry forward any unused contribution amount to future years.
- It’s flexible – There is no maximum age for contributing to a TFSA.
To discuss how you can save with a TFSA or to learn more, contact your financial advisor.