TYPES OF TFSA INVESTMENTS
A TFSA may contain any of a number of eligible investment vehicles, including deposit-type savings accounts, mutual funds or self-directed plans. Your credit union investment specialist can help you choose the right one based on your goals and your tolerance for investment risk.
The types of investments eligible for TFSAs are restricted under the Income Tax Act. Options available through credit unions vary and may include:
- Term deposits and GICs
- Variable interest savings accounts.
- Credit union shares.
- Index-linked term deposits.
- Mutual funds.
- Publicly traded securities.
There are restrictions on holdings in a self-directed TFSA. Entrepreneurs and small business owners should check these rules carefully, particularly regarding investments in companies or ventures where you hold a significant financial investment (generally more than 10%) or where there is a nonarm’s length relationship.
There are punitive tax measures that discourage holding non-qualified/prohibited investments and ‘asset transfer transactions (swap transactions.)