5 reasons to get a TFSA
What if we told you there was a tax-free way to grow your savings without any withdrawal limitations? You’d be interested, right?
1. Start early
All you need to open a TFSA is to be 18 years of age with a valid Canadian social insurance number (SIN). That’s it.
2. Tax-free savings
Amounts deposited in a TFSA and the interest generated (from investment income, dividends or capital gains) are tax-free, even when withdrawing them.
3. Tons of options
Combine your TFSA with:
Investment accounts offering a diverse portfolio and interesting returns
High-Interest Savings Accounts offering excellent guaranteed returns
Guaranteed Investment Certificates (GIC) offering progressive interest rate bonuses
4. Make withdrawals anytime
Withdraw money when you need it. It’s never locked away.
Plus, your following year’s contribution limit will be increased by whatever amount you withdraw. This means that you won’t be penalized for redepositing all or part of the amount you withdrew. And remember, there are no limits on withdrawals.
However, you have a contribution ceiling. If you go over it, you’ll have to pay taxes on the excess amount as well as withdraw it from the account. Check out the TFSA annual contribution limits since its creation in 2009.
5. Your TFSA has no impact on your RRSP
The amount you deposit in your TFSA has no effect on your RRSP maximum contribution limit, because that limit is based on your income.
For more information and to help you reach your objectives, speak to a financial security advisor!