Tax-Free Savings Account (TFSA)

A Tax-Free Savings Account (TFSA) is a registered savings account that allows taxpayers to earn investment income tax-free inside the account.

  • Each year you can contribute an amount up to your contribution room for the year.

    YearContribution Amount
    2009 - 2012 $5,000
    2013 - 2014 $5,500
    2015 $10,000
    2016 - 2018 $5,500
    2019 $6,000
    Total Contribution Amount* $63,500
  • Any unused contribution room from previous years is carried forward.
  • Any interest earned on the savings, even from investments, will not be taxed.
  • You can withdraw your money at any time, tax-free, for any reason, and any money you withdraw can be recontributed the following year.**

Important Information

Contributions

  • Contributions to a TFSA will not be deductible for income tax purposes, but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn.
  • Unused TFSA contribution room can be carried forward to future years. For example, if you contribute $4,500 to your TFSA in 2012, your 2013 contribution room will be $6,500: $1,000 of unused room for 2012 plus the full $5,500 contribution room for 2013.
  • Over-contributions - above your annual contribution limit - are charged a penalty by the Canada Revenue Agency (CRA).

Withdrawals

  • You can withdraw funds from the TFSA at any time for any purpose, but you cannot recontribute the withdrawn amount until the following year.
  • The amount withdrawn can be put back in the TFSA the following year without reducing your contribution room.
  • Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.

Spousal contributions

  • Contributions to a spouse's TFSA is allowed.
  • TFSA assets can be transferred to a spouse upon death without affecting the survivor's existing contribution room.
  • Interest paid on a loan used to make a TFSA contribution is not tax deductible.

Contributing to your Tax Free Savings Account

You can contribute to a TFSA at your branch, over the phone, or in Online Banking. Once your TFSA is set up, you can transfer money to your TFSA whenever you need.

 

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