What is a TFSA?
A Tax Free Savings Account is a government approved savings plan in which the income earned is tax sheltered.
What does a TFSA mean to you?
If you are over the age of 71 or you have no RSP room this is an alternative vehicle that you can use to save money and any interest you earn is tax sheltered. If you have not reached your earning potential you can save in a TFSA and transfer the funds to an RSP during your peak earning years – this allows you to maximize your tax savings. Funds can be withdrawn without penalty or loss of contribution room.
Who is Eligible to Contribute?
Anyone who files an income tax return may contribute to a TFSA. You will receive an annual Notice of Assessment from the CRA stating what you can contribute.
What Types of TFSA’s are Available?
Two types of individual plans are offered: Deposit Type Plans and Mutual Funds
Deposit Type Plans
Deposit type TFSA’s offer familiar savings options including savings accounts or term deposits. The rate of interest may be variable, fixed or index-linked. Key choices include the term of the deposit (ranging from daily to multi-year); and frequency of interest calculations or deposits to the TFSA (daily, monthly, annually or end of term).
Mutual Funds
There are many types of funds available, because of the wide variety of funds and other considerations, when choosing a TFSA, it is wise to obtain help from Sydenham’s financial representatives. Mutual funds investments do and will fluctuate in value, they don’t provide a guaranteed rate of return. Mutual funds are not covered by deposit insurance.
Mutual funds are offered through Qtrade Asset Management Inc., member MFDA.
