Tax-Free Savings Account (TFSA)

The TFSA allows you to set money aside in eligible investment vehicles and watch those savings grow tax-free throughout your lifetime. TFSA savings can be used to purchase a new car, renovate a house, start a small business or even take a family vacation.

A Tax Free Savings Account is a great new tax-sheltered account and, with the right advice, it can help you achieve your investment goals. At PenFinancial, you are able to take advantage of Investment Advisor services at no cost or obligation – so be sure to talk to us today about TFSAs!

How the TFSA Works

• Canadians aged 18 and older can save up to $5,000 every year in a TFSA.
• Contributions to a TFSA will not be deductible for income tax purposes but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn.
• Unused TFSA contribution room can be carried forward to future years.
• You can withdraw funds from the TFSA at any time for any purpose.
• The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.
• Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.
• Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death.

How Is a TFSA Different From a Registered Retirement Savings Plan (RRSP)?

• Contributions are not tax deductible
• Withdrawals are not taxable
• Withdrawals increase contribution room – members can recontribute the withdrawn amount the following year
• Every Canadian over the age of 18 can contribute up to $5,000 per year. Contribution room is not based on income, the same for everyone.

Click here for Frequently Asked Questions.

Just call any one of our branches and let them know you’d like to speak with an Investment Advisor and they’ll set it up – it’s that easy.