Tax-Free Savings Account (TFSA)

Quick facts

Investment type: registered investment where income (interest, dividends and capital gains) and withdrawals are not taxable
Maximum annual contribution: $5,000 in 2009; then, indexed to the inflation rate and rounded to the nearest $500 on a yearly basis

Who should get this registered savings plan?

Savers age 19 and over who want to build their savings and save on taxes. Because it complements other registered savings plans (RRSP, RESP, etc.), the TFSA is the perfect tool to help you save up for important projects, cover unexpected expenses or get tax-free investment income.

Find out the difference between RRSPs and TSFAs by comparing TFSAs and RRSPs.

Features


Eligible investments	Certain guaranteed fixed-rate investments, Redeemable Term Savings, Climbing-Rate Term Savings, etc. Market-linked Guaranteed Investments, including Profile Guaranteed Investment Portfolios. Mutual funds¹

Contribution limit	Includes: Maximum annual contribution ($5,000 in 2009; then, indexed to the inflation rate and rounded to the nearest $500 on a yearly basis). Any unused contribution room carried over from the previous year. Any amounts withdrawn from the TFSA during the previous year, except for qualifying transfers⁴.

Income taxation	Income generated is not taxable (interest, dividends and capital gains). Contributions to the account, capital losses and interest on amounts borrowed to invest in the account are not deductible for tax purposes.

Full or partial withdrawal	Amounts withdrawn are not taxable and will generate new contribution room for the following year.

Did you know?

For optimal after-tax investment income, focus on TFSA investments that generate more income or that are highly-taxed.

Calculate

Use the Department of Finance Canada calculator to estimate your potential tax savings when you contribute to a TFSA.





	By phone (Members)	Contact your caisse


	At the caisse	Make an appointment with a caisse advisor: online by phone

1. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Mutual fund are sold and distributed by Acadia Financial Services Inc. Acadia Financial Services Inc. is a wholly-owned subsidiary of Financière Acadie Inc. which is itself a wholly-owned subsidiary of the Fédération des caisses populaires acadiennes. Acadia Financial Services Inc. makes it services of mutual funds brokerage available in association with participating credit unions and other financial organizations. Unless otherwise stated, mutual fund securities and cash balances are not covered by the New Brunswick Credit Union Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions.

2. A direct transfer between TFSAs of the same holder, or the amount that is transferred directly to a spouse or common-law partner or former spouse or common-law partner if the transfer relates to a division of property due to the breakdown of their marriage or common-law partnership.