savings account (TFSA)
What is a TFSA?
A tax-free savings account is ideal for medium- or long-term savings projects. The returns generated in the account are not taxable, even if you make a withdrawal. Additionally, your money can be accessed at any time, which makes it an excellent emergency fund.
How much can you contribute to your TFSA?
You can contribute up to the limit set for the year underway, regardless of your income. Furthermore, you may carry forward any unused contribution amounts into future years.
Contribution room for 2023: $6,500
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Four types of investment for your TFSA
Choosing iA for your TFSA is choosing the company that has been first in net segregated fund sales in Canada since 2016. Our funds are managed by top portfolio managers and follow the most innovative market trends. Different investment options are available based on your investor profile and your risk tolerance.
Segregated funds are like mutual funds but offer many advantages, including guarantees that protect your investments against market downturns.
Guaranteed interest funds
Guaranteed interest funds offer a fixed interest rate that is guaranteed for the life of the investment. They guarantee 100% of your capital at maturity.
High interest savings account
Simple and accessible, the high interest savings account allows you to save risk-free based on the interest rate in force.
Daily interest funds
The interest in the Daily Interest Fund (DIF+) is earned in your investments on a daily basis and is paid monthly.
Frequently Asked Questions
How is my TFSA contribution room calculated?
Since 2009, anyone age 18 years of age and over is entitled to deposit in their TFSA a maximum amount which may vary from year to year. Contribution room which has not been used in one calendar year is deferred to be added to the maximum eligible amount.
Here are the contribution ceilings for previous years:
- - 2009 to 2012: $5,000
- - 2013 and 2014: $5,500
- - 2015: $10,000
- - 2016 to 2018: $5,500
- - 2019 to 2022: $6,000
- - 2023: $6,500
For example, the accumulated room for a person who has never had a TFSA and who was at least 18 years of age in 2009 would amount to $88,000 in 2023.
The contribution room of a person who was 18 years of age after 2009 accumulates from the year in which this person reached legal age.
In addition, the amounts withdrawn from a TFSA account in a calendar year can be contributed again in a future year.
Are there penalties if I exceed my TFSA contribution room?
Yes. As long as the excess contribution remains in the account, a tax equivalent to 1% of the surplus, for each applicable month, must be paid to the Canada Revenue Agency (CRA).
If you exceed the eligible limit, you will have to pay this tax until you withdraw the surplus or until you have the contribution room to keep it.
What is the minimum age for contributing to a TFSA?
The minimum age for contributing to a TFSA is 18 years.
There are exceptions in certain provinces and certain territories where the legal age to sign a contract, and consequently to open a TFSA, is 19 years. In these regions, a person aged 18 years can still accumulate contribution room which can be subsequently used.
Up to what age can I contribute to a TFSA?
Unlike an RRSP, there is no maximum age for contributing to a TFSA.
Are contributions to a TFSA tax deductible?
No. The contributions to a TFSA can save you taxes on the gains realized in the account, but unlike contributions to an RRSP, they are not tax deductible.
Are withdrawals taxable?
No. Contrary to the RRSP, withdrawals from a TFSA account are not taxable, just like the investment income earned in the account.
Can I contribute to my spouse’s TFSA?
Contrary to the RRSP, there is no tax benefit to contributing to your spouse’s TFSA. However, you can give an amount to any member of your family so that they contribute to their own TFSA, as long as the person is over 18 years of age.
Is the TFSA part of the family patrimony?
No. Even if the TFSA is often used in view of retirement, it is not a retirement plan strictly speaking, and therefore it is not part of the family patrimony (RRSP, primary residence, furniture).
Consequently, a breakup between spouses or married people does not necessarily force them to divide the amounts in a TFSA, unless specified by your matrimonial regime or a contract.
Can I have a TFSA if I am not a Canadian citizen?
Yes. Any person aged at least 18 years (or 19 years in certain regions) residing in Canada and having a valid social insurance number (SIN) can contribute to a TFSA. Contribution room is generated as soon as the year of arrival.
If I have left the country, can I contribute to a TFSA?
No. You cannot contribute to your TFSA or accumulate contribution room during the years where you are not a resident. However, you can keep the money already accumulated in your TFSA if you have one. In this case, your investment income and withdrawals will continue to be tax free.
How do you open a TFSA account?
To open a TFSA account, simply talk to an advisor or a financial security advisor.
Your advisor can open your TFSA account after analyzing your financial needs. He or she will also advise you on the investment products to consider.