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FAQ's Regarding TFSA's
A TFSA is a savings account that helps you set aside money for future needs. The tax-sheltered savings are the biggest benefit of a TFSA. With a TFSA, you invest money into the account without being taxed on the income earned or growth of the assets held in the TFSA. This tax-free growth results in faster savings compared to investing in a non-registered account.
If you are a resident of Canada, 18 years of age or older and have a valid Social Insurance Number, you are eligible to open a TFSA.
The TFSA contribution room is the maximum amount that can be contributed to a TFSA and is set every year by the Canada Revenue Agency.
The TFSA contribution room is made up of the following:
- The TFSA contribution limit for the current year;
- Any unused TFSA contribution room from previous years;
- Any withdrawals made from the TFSA in the previous years.
To learn more about TFSA contribution room, click here.
The amount of contribution room you have each year can be found the following ways:
- If you have created an online account with CRA, sign in here.
- Read your latest Notice of Assessment as supplied by the Canada Revenue Agency.
- Contact the CRA.
No! You can spend the money any way you choose, depending on your goals. Are you saving for a wedding? How about a new car? Maybe you want to start your own business or take a vacation? A TFSA is available to individuals in any stage of life, regardless of income level, who want a tax-efficient way to save for future events.
No! You can maintain the TFSA for as long as you want and there are no age restrictions for when the account needs to close.
Yes! You can have as many TFSA's as you want, provided you do not exceed the lifetime limit provided by the CRA.
When you contribute less than the maximum contribution limit, the difference is referred to as your 'unused contribution room'. Your unused contribution room accumulates each year and is carried forward indefinitely, allowing you to 'catch up' in future years.
It's important to keep track of your contribution room. If you contribute more than allowed, you will be penalized by the CRA. An excess contribution will result in 1% per month penalty on the highest excess amount in each month. The tax applies until the entire excess amount is withdrawn or absorbed by new contribution room in subsequent years.
Visit the Canada Revenue Agency's website for more information on how to find your TFSA contribution room.
Just like any savings account with Fusion, the deposits you make to your RESP are fully guaranteed by the Credit Union Deposit Guarantee Corporation.
Stop by your local branch and speak with one of our knowledgeable Member Service Representatives, or book an appointment with one of our wealth advisors to discuss your financial plan.
Once your TFSA is set up, ask your advisor about setting up automatic payments out of your account. Watch your savings grow without having to remember to make payments!
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