Have you heard about this saving strategy before? Well, the Tax Free Savings Account, or simply TFSA was introduced at the beginning of 2009 by the Government of Canada. Basically, the TFSA is another option to save more money and most importantly, you don’t pay taxes!
As I am not an expert, I don’t intend to give you a lot of details about this saving strategy. I just would like to give you basic information, as I am planning to open a TFSA soon. As I said before, you don’t pay taxes when you open your TFSA and of course you can growth your money tax-free. However, there are some limitations between the TFSA and RRSP. They’re very similiar, but with important differences:
- The limit of contribution for every year is $5,000 dollars. As it started in 2009, you have $5,000 dollars to contribute this year;
- You can hold a number of income-earning holdings in the account, such as equities, mutual funds, bonds, savings accounts, and term deposits;
- You don’t need earnings to make contributions;
There are a lot of financial institutions that you can consider if you’d like to open a TFSA account. Below you can find the links to open a TFSA account with the big 5 banks:
If you’d like to learn more about the Tax Free Savings Account, visit the links posted above and also the TFSA webpage.