Tax Free Savings Account
A tax free savings account (TSFA) is an account where income earned on deposits and investments is not taxed. You can also withdraw money at any time without being taxed. Any funds withdrawn from the account can be deposited again at the start of the following year.
The 2016 contribution limit is $5,500. This is a decrease from the annual contribution limit of $10,000 in 2015. Contributions are not tax-deductible. Unlike an RRSP, money you contribute to your TFSA won’t affect your eligibility for federal income-dependent benefits, like the Guaranteed Income Supplement and Old Age Security.
Unused TFSA contribution room is carried forward and accumulates in future years.
You also can transfer your Tax Free Savings Account assets to your spouse or common-law partner upon death without it impacting the survivor’s existing contribution room.
TFSA’s offer a variety of investment options including GIC and mutual funds; talk to your EFG advisor to find out more.