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Tax Free Savings Account - TFSA

The Tax Free Savings Account (TFSA) allows Canadians to set money aside in eligible investment vehicles and watch those savings grow tax-free throughout their lifetimes.  TFSA savings can be used for any purpose, such as to purchase a new car, renovate a house, start a small business or take a family vacation. 


How the TFSA Works


  • As of January 1, 2013, Canadian residents, age 18 and older, can contribute up to $5,500 annually to a TFSA. This is an increase from the annual contribution limit of $5,000 for 2009 through 2012 and reflects indexation to inflation.

  • Your contributions to a TFSA are not deductible for income tax purposes but the investment income earned in your TFSA is not taxed, even when withdrawn.

  • Your unused TFSA contribution room is carried forward and accumulates for future years.

  • You can withdraw funds available in your TFSA at any time for any purpose — and the full amount of withdrawals can be put back into your TFSA in future years. Re-contributing in the same year may result in an over-contribution amount which would be subject to a penalty tax.


All income levels and walks of life can benefit from a TFSA, but only careful review of your financial situation will determine how to optimize the use of TFSAs, RRSPs and non-registered investments.




  • Contributions to an RRSP are deductible and reduce your income for tax purposes. In contrast, your TFSA savings contributions are not deductible.

  • Withdrawals from an RRSP are added to your income and taxed at current rates. Your TFSA withdrawals and growth within your account are not included in your income—they are tax-free.

How Is a TFSA Different From a Registered Retirement Savings Plan?


Both an RRSP and TFSA offer tax advantages by allowing you to accumulate investment income tax-free within the plan or the account, but they have key differences.


TFSA: Cashable 1 year Fixed Deposits

Minimum Deposit $5000

Redeemable at any time

Competitive rates guaranteed for the term


TFSA: Fixed Term Deposits

Minimum Deposit $1000

1 - 5 year terms

Non-redeemable prior to maturity

Competitive rates guaranteed for the term


TFSA: Mutual Funds

Offered through Credential® Asset Management


Contact us today to find out how you can begin growing your money tax free!

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