The Tax Free Savings Account (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. TFSAs also provide another tax sheltered investment option if you have maximized your RRSP contributions.

How the TFSA Works

• Canadians aged 18 and older can save up to $5,500 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for income tax purposes but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn.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• The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.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• Withdrawals increase contribution room – members can recontribute the withdrawn amount the following year.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 $5,500 per year. Contribution room is not based on income, it's the same for everyone.

Declaration of Trust- Members please review if you currently hold TFSA's with PenFinancial Credit Union

Declaration of Trust Document

This calculator is designed to help compare a normal taxable investment to a TFSA and a RRSP.

Our free Financial Advisors are ready to help you understand how a TFSA can help you achieve your financial goals.  Don’t delay, visit your branch or give us a call and find out how you can start saving tax free.