Are you making the most of this flexible option to help you save money? The Tax-Free Savings Account (TFSA) is a registered account that lets Canadians earn money tax-free.
With a TFSA, you can –
- Pay no tax on investment income and growth you earn in the account
- Withdraw your money at any time,1 tax-free
- Contribute an additional $5,5002 in 2013
Unused contribution room is automatically carried forward. That means, if you've never contributed to a TFSA and you were 18 or older in 2009 (the year it was introduced), you can contribute up to $25,500 in 2013.3
A TFSA is a great way for you to save for your short- or long-term goals. Whether you're putting money aside for a down payment on a house, saving for a major purchase like a car or a vacation, building your rainy day fund or making sure you have enough for a comfortable retirement, a TFSA can help.
Start benefiting from tax-free savings today! Find out how you can get started with a TFSA or learn more about your TFSA choices.
The benefits of a TFSA
There are three main advantages to a TFSA:
- Tax-free growth
- Tax-free withdrawals
- Put back any money4 you withdraw
1. Tax-free growth
You pay no tax on the investment income or growth generated in your TFSA. This tax-free growth can help you build your savings faster.
Because capital gains and other investment income earned in a TFSA are not taxed, a person contributing $5,000 a year to a TFSA for 20 years could enjoy additional savings of $18,506 compared to saving in an unregistered account.
2. Tax-free withdrawals
You can make withdrawals when you want1 your money and not pay any tax. That makes the TFSA suitable for both short- and long-term savings, and also gives you flexible access to your money if an unexpected need arises.
3. The ability to put back any amounts you withdraw
You can re-contribute amounts4 that you withdraw beginning in the year after you withdraw them. In addition, your unused contribution room is carried forward indefinitely. You can contribute any or all of your accumulated contribution room whenever you want.
Reach your financial goals faster. Visit any TD Canada Trust branch, or call 1-866-222-3456 and open a TFSA today.