Earn 2.00% on your savings – tax-free!
Date posted: March 1, 2013
Open a TFSA today and start earning 2.00%* on every dollar – Tax-Free!
If you have ever thought about opening a Tax-Free Savings Account, there has never been a better time than now.
With Manulife Bank offering 2.00%* on their Tax-Free Advantage Account and an increased contribution limit – now standing at $5,500 per year, this is the time to benefit from this high interest saving account.
What is a TFSA?
A Tax-Free Savings Account (otherwise known as a TFSA) is a savings account, where the interest earned on the savings is non-taxable. Available to all Canadian residents, 18 years of age and older, a TFSA can be used to save money for any purpose – not just retirement. Be it a new car, a winter getaway or a down payment on a home. The funds can be withdrawn at any time without incurring any taxes.
The Canadian Government first introduced this type of savings vehicle in 2009 with a contribution limit of $5000 per year. As of January 1st, 2013, the limit increased to allow for a maximum contribution of $5,500 per year. This increase, which is the first adjustment since implementation, represents the government’s commitment to index the limit according to inflation.
An alternative to registered savings
Just like with registered savings, contribution room is never lost. Any unused contributions either from this year or previous years is carried forward. What this could mean for you is that if you have never contributed to a TFSA since the program was implemented in 2009, you are entitled to make a $25,500 contribution this year. Given this scenario, moving forward in 2014 you will then be allowed to contribute another $5,500.
Unlike registered savings, contributions can be withdrawn at any time, tax-free! And if you choose to open a Manulife Bank Tax-Free Advantage Account, there are no fees associated with deposits or withdrawals.
Choosing the right TFSA
Each individual has specific investment goals and choosing the right investment approach for your TFSA can be confusing. Everyone will likely want to benefit from earnings that are tax free; however some will prefer a fully guaranteed return, while others might be interested in yielding a higher interest rate from their TFSA. Options, such as balanced income portfolios, dividend and equity funds can be discussed with your advisor.
Whether your goals are short-term or long, the income generated in a TFSA is tax-free and the benefits can be substantial.
Call your Financial Advisor today to review all your options and learn how we can get a TFSA working for you! (514) 620-0051.