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  • A Tax Free Savings Account (TFSA) is a registered savings plan authorized by the Canada Revenue Agency (CRA) that allows you to grow your savings tax free.
  • Income earned in a TFSA is not taxable and withdrawals from a TFSA are not taxable.
  • Withdrawals from a TFSA will not affect government benefits that are based on income.
  • Contributions to a TFSA are not tax deductible.
  • A TFSA should not be treated as a regular savings account where there could be frequent withdrawals; rather, it should be treated as a vehicle for longer term savings or for specific savings goals.
  • A TFSA is designed to provide tax free savings for any purpose, including retirement. A RRSP is designed for retirement savings purposes specifically.
  • Contributions to a TFSA are not deductible for tax purposes whereas contributions to a RRSP are tax deductible.
  • Withdrawals from a TFSA are not taxable whereas withdrawals from a RRSP are taxable when withdrawn.
  • Anyone who is 18 years of age and a Canadian resident with a valid social insurance number can contribute to a TFSA. Only individuals with contribution room (i.e. having earned income in Canada) can contribute to a RRSP.
  • There is no maximum age limit to contribute to a TFSA. Contributions can be made to a RRSP only until the end of the year in which you turn 71 years of age.
  • Contribution limits are different for a TFSA than a RRSP. Maximum contributions to a TFSA are a set annual amount which is the same for everyone. Maximum contributions to a RRSP depend on your income and other factors.
  • To contribute to a TFSA, you must meet the following eligibility requirements:
    1. Have a Social Insurance Number (SIN)
    2. Be 18 years of age or over
    3. Be a resident of Canada (Individuals only, no trusts or corporations)
  • You can contribute to a TFSA anytime during the year that you meet the eligibility requirements. Click here for details.
  • The annual contribution limit is prescribed by the Government of Canada and it is the same for everyone. Click here for contribution limits.
  • If you do not use all of your contribution room in previous years, you can carry over the unused portion to future years.
  • You cannot exceed the maximum contribution limit otherwise penalties will apply.
  • Withdrawals from a TFSA can be added back to the TFSA according to the regulations; this would be in addition to your maximum annual contribution limit.
  • You can make your contribution all at once, often referred to as a lump sum contribution, up to the maximum contribution limit.
  • You can contribute regularly scheduled amounts via automatic transfers from your chequing or savings account directly to your TFSA Savings Account.
  • If you have an existing TFSA at the Caisse, you can make TFSA contributions by logging into Online Banking and transferring money from your chequing or savings account to your TFSA account.
  • The return on a Tax Free Savings Account depends on the type of investment that you selected.
  • If the TFSA is a savings account or a Guaranteed Investment Certificate (GIC), the return is paid in the form of interest. The interest is not taxable whether you leave the interest in the TFSA or whether you withdraw it.
  • If the TFSA is a mutual fund or other type of investment, you would need to confirm in what form the return will be received (ex. interest, dividends or other).
  • Interest is ‘compounded’ when you earn interest on your interest.
  • If the interest earned is left in the account, the interest rate is applied to the original deposit as well as to the amount of interest earned, therefore you would be earning interest on interest.
  • Compound interest can make a big difference in the amount of return that you earn over time.
  • You can contribute to a TFSA via a savings account which is a flexible, simple way to save and there are no fees. Deposits can be made anytime into the account and you can transfer your funds to another TFSA investment option at any time.
  • You can contribute to a TFSA via a GIC which is a secure way to grow your savings as the interest rate is fixed.
  • You can contribute to a TFSA via a mutual fund through our partner, Credential Asset Management, with varying degrees of risk and return according to your preferences.
  • Both a RRSP and a TFSA allow you to grow your savings tax free.
  • A RRSP is designed to give you tax savings when your income is higher/when you are working (by providing you with a tax deduction when you contribute to the RRSP) however you will pay taxes when you withdraw the funds from the RRSP.
  • A TFSA does not provide a tax deduction when you contribute however withdrawals from a TFSA are not taxable.
  • The benefits of contributing to a TFSA versus a RRSP will depend on your age and financial situation. It may be to your benefit to maximize your tax deduction with a RRSP or conversely to take full advantage of the TFSA contribution limit. It could also be to your advantage to contribute to both a TFSA and a RRSP. Every individual’s situation is different.
  • Contact a Financial Services Advisor who can provide you with helpful advice before you make your decision.
  • Click “Open Account” above and complete the online form or contact any of our branch locations to open a TFSA.