Tax Free Savings Accounts
A Tax Free Savings Accounts (TFSA) is a flexible, registered general-purpose savings product that allows Canadians to earn tax-free investment income.
All Canadian residents age 18 or older can contribute up to $5,500 annually to a TFSA.
Here are some benefits:
- Withdrawals from a TFSA are tax-free.
- Unused TFSA contribution room is carried forward and can be used in future years without penalty.
- Choose from a wide range of investment options such as a Daily Savings Account, Mutual Funds, Guaranteed Investment Certificates (GICs) or Bonds.
- Contributions are not tax-deductible.
- Funds can be transferred or given to a spouse or common-law partner for them to invest in their TFSA.
- TFSA assets can generally be transferred to a spouse or common-law partner upon death.
- You can designate a beneficiary
- Any interest or income earned does not affect your eligibility for Old age Security (OAS) or Canada Pension Plans ( CPP)
- TFSA contribution room is tracked and reported on your notice of assessment. ( NOA)
- Your income tax return must be filed each year to qualify for your annual contribution amount.