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TFSA Benefits
The Tax-Free Savings Account has generated a lot of positive interest across Canada—and for good reason. Here are the special features that make a TFSA such a great savings option:
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Tax-Free Investment Income and Withdrawals
Unlike other registered tax-deferred plans, earnings throughout your lifetime from qualified investments in your Tax-Free Savings Account—whether interest, dividends or capital gains—are never subject to Canadian tax. You don’t pay taxes even when you withdraw your money.
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Flexible Withdrawals
You can withdraw funds from your TFSA whenever you want (depending on what you've invested in), and use the funds for multiple purposes. This makes a TFSA ideal for both your short and long-term investment goals. For example, you could save to purchase a new car, renovate your home, buy a new home, start a small business, take a vacation, build an emergency fund, grow your retirement nest egg and more.
As an added benefit, at RBC®, you will never pay any withdrawal or annual administration fees on your Tax-Free Savings Account.
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No Income Requirement
You don’t need to have earned income to contribute to a TFSA. This is excellent news if you are retired or a stay-at-home parent. (Your spouse or common-law partner can give you funds to contribute to your own TFSA. There are no tax consequences to either you or your spouse.)
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Indefinite Carry-Forwards
With a Tax-Free Savings Account, unused contribution room is carried forward indefinitely, so you can contribute whenever you have the money.
For example, if you contribute $3,000 to your TFSA in 2009, your contribution room for 2010 will be $7,000 ($2,000 carried forward from 2009 plus $5,000 for 2010).
Withdrawals are also added to your unused contribution room starting the following year.
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Investment Choice
You can hold a wide range of investments in your TFSA, including RBC Funds, RBC GICs and RBC Savings Deposits. You can also invest in stocks and bonds through RBC Direct Investing™ and RBC Dominion Securities. This makes the Tax-Free Savings Account appropriate for all types of investors.
In addition, automatic contributions will be easy to make on a regular basis with an RBC TFSA-Matic™. Try the TFSA calculator today to see the benefits of regular, ongoing contributions.
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Lifelong Eligibility
There is no requirement to collapse your TFSA at a set age. You can keep it as long as you live. This makes it especially valuable as part of a long-term strategy that also includes RSPs/RIFs.
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No Lifetime Contribution Limits
There is no lifetime limit on the amount of your TFSA contributions. If you are eligible, you will accumulate $5,000 of contribution room every year you are a resident of Canada, which will increase with inflation, in $500 increments.
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No Impact on Federal Benefits or Credits
Income earned and TFSA withdrawals are not included as income for tax purposes, which means that they will not affect your eligibility for Federal income–tested government benefits and credits such as Old Age Security (OAS) or the Goods and Services Tax (GST) credit.
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Start Investing Today!
An RBC advisor will work with you to develop an investment plan specifically tailored to your goals.
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Open a TFSA |
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Need advice? |
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Call 1-800-463-3863 |
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Book an appointment with an
RBC® advisor at your local branch. |
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Information about the Tax-Free Savings Account is based on what is currently available from the Canadian government and can be subject to change.
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