TFSA - Tax Free Savings Account
Tax-Free Savings Account (TFSA)
A Tax-Free Savings Account (TFSA) allows individuals to save or invest with tax-free growth and tax-free withdrawals. Contributions are not tax-deductible, but all investment income and capital gains earned within the plan are not subject to tax, even when withdrawn. Withdrawals do not affect federal income-tested benefits, and withdrawn amounts create new contribution room in a future year. TFSAs are well suited for short-, medium-, and long-term goals, offering maximum flexibility for clients at any income level.
TFSA Advantages
Maximum flexibility and liquidity
Ideal for both short- and long-term goals
No tax reporting on withdrawals
Key Features
Contributions are not tax-deductible
Investment growth and withdrawals are completely tax-free
Annual contribution limits set by the government
Withdrawals create new contribution room in a future year
Does not affect income-tested government benefits
Best For
Clients at any income level
Emergency savings
Retirees supplementing income tax-free
Who Can Open
Canadian residents 18 or older (19 in some provinces)