What is a Tax Free Savings Account?
TFSA is a flexible investment account that can help you meet both your short-term and long-term savings goals.
- Investment income in a TFSA—whether you’re earning interest, dividends or capital gains—are not taxed, even when withdrawn. This tax-free compound growth means that your money grows more quickly inside a TFSA than in a taxable account.
- Annual contribution limit is $5,500 for 2013 and $5,000 for the years 2009 to 2012. This annual limit will rise along with inflation in future years, in $500 increments. In addition, you can carry forward unused contribution room indefinitely. The federal government will report your TFSA contribution room to you annually.
- Eligibility – Any Canadian resident age 18 or older with a Social Insurance Number can open a Tax-Free Savings Account.
- Income Requirements – You are not required to have earned income to contribute to a Tax-Free Savings Account
- Tax Benefits – There is no tax deduction for contributing to a TFSA. However, the returns your investments generate (interest, dividends or capital gains) are not taxable (except for any foreign tax on foreign investments).
- Withdrawals – You can withdraw money from your account at any time, (depending on what you invested in). You can re-contribute the amounts you withdrew anytime after the year of withdrawal. In addition withdrawals are tax free.
- Investment Options – You can invest in Vanguard term deposits (1-5 years), variable deposits, and mutual funds. As well as stocks and bonds through our online broker Qtrade
- Transfers in from other institutions and pension rollovers easily arranged
- Variable rate deposits or fixed rate terms up to 5 years available
- Automatic TFSA deposit transfers at varying frequencies at no fee
- Minimum term deposits of $500
- Competitive Rates
Click here to download the TFSA Declaration of Trust