Tax Free Savings Accounts were created in 2009 as a way for Canadians to invest for their future. With the latest change in Government, Canadians can now contribute up to $5,500 per year in their TFSA.
Here is what you need to know about a TFSA:
1) You are allowed to contribute up to $5,500 per year to an account. If you have not contributed previously you can contribute up to $46,500 into a TFSA in 2016.
2) A TFSA is not your typical “savings account”. Many people are under the assumption that a TFSA operates like your typical bank savings account that earns you almost nothing in interest. However, a TFSA allows you to invest in a multitude of different securities including stocks, bonds, mutual funds, ETFs, mortgages, GICs etc.
3) Any income earned within the TFSA is not taxed. (There is also no tax deduction for contributions to the TFSA.)
4) You must be at least 18 years of age to open an account.
5) You can withdraw from a TFSA at any time.
6) A TFSA is a smart investment choice for most people!
Mortgage Broker & Investment Advisor