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Choose The Tax-Free Savings Account For A Better Way To Save
Are you looking for a better way to save? The Tax-Free Savings Account (TFSA) was introduced by the federal government in the 2008 budget, giving Canadians 18 years of age and older a new way to save. Contributions to a TFSA will grow tax-free within your account and you can use your savings at any time. Whether you are saving for a new home, a child's education or a family vacation, the Tax-Free Savings Account will help you meet your savings goals.
You can contribute up to $5,000 each year to a TFSA, regardless of your income. TFSA contributions are not tax-deductible, but your investments will grow tax-free and you will not pay tax on income or capital gains earned within your TFSA, even when you make a withdrawal.
If you do not contribute the maximum amount, your unused contribution room can be carried forward to any future year. If you contribute more than the maximum amount, your excess contributions will be subject to a penalty tax of one percent per month.
Access Your Savings When You Need It
You can withdraw funds from your TFSA at any time, for any reason, tax-free. When you withdraw funds from your account, the withdrawal amount will be added to your contribution limit the following year, which means you do not lose your contribution room when you make a withdrawal.
Withdrawals from a TFSA will not affect income-tested federal benefits, such as Old Age Security, the Guaranteed Income Supplement and the Canada Child Tax Benefit.
The Benefits Of A TFSA
A Tax-Free Savings Account (TFSA) is a flexible savings account that allows you to put your money aside for what matters most to you and to access your funds whenever you need it. Your investments will grow tax-free and you do not have to add withdrawals to your income.
Your CIBC Wood Gundy Investment Advisor is available to discuss how a TFSA can help you meet your financial goals.
Use our Find An AdvisorOpens a new window in your browser. tool to locate a CIBC Wood Gundy Investment Advisor near you to take the first step to achieving your financial goals.