Tax-Free Savings Account (TFSA)
- Investment type: registered investment where income (interest, dividends and capital gains) and withdrawals are not taxable
- Maximum annual contribution: $5,000 per year since 2009; then, indexed to the inflation rate and rounded to the nearest $500 on a yearly basis
Who should get this registered savings plan?
Savers age 18 and over who want to set aside up to $5,000 a year, tax-free. Because it complements other registered savings plans (RRSPs for retirement, RESPs for children’s education, etc.), the TFSA is the perfect tool to help you:
- save up for important projects
- cover unexpected expenses
- get tax-free investment income
Excess contributions are subject to a tax of 1% per month**.
Visit the Canada Revenue Agency website
|Full or partial withdrawal||Qualifying amounts withdrawn** are not taxable and will generate new contribution room for the following year.|
|Other||The combined money you have in eligible registered savings plans or contracts is automatically covered in full by the Deposit Insurance Corporation in Ontario (DICO).
Find out more about deposit insurance (FAQ).
Call your advisor or financial planner at your Caisse populaire to open a TFSA.
Did you know?
Ontario residents may now directly designate a beneficiary on their TFSA.
* Mutual Funds are offered through Credential Asset Management Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual fund securities and cash balances are not insured nor guaranteed, their values change frequently and past performance may not be repeated.
** Following changes recommended by Finance Canada, withdrawals of over contributions, non-qualified investments and amounts attributable to swap transactions, or of any related investment income, do not create additional TFSA contribution room. Some of this income will be taxed at 100%.