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BENEFITS OF TAX FREE SAVINGS ACCOUNT (TFSA)
TFSA is an account that provides tax benefits for saving. Investment income, including capital gains and dividends, earning in a TFSA is not taxed , even when withdrawn. A TFSA may contain cash and/or other investments such as mutual funds, certain stocks, bonds or guaranteed investment certificates (GICs).
Tax-Free Savings Account (TFSA)
🔹 What is TFSA?
A Tax-Free Savings Account (TFSA) is a flexible, government-registered account that allows Canadians to save and invest money with tax-free growth.
🔹 Key Benefits
- Tax-Free Growth: Investment income, dividends, and capital gains earned inside a TFSA are never taxed, even when withdrawn.
- Contribution Room: Annual limit is set by the CRA ($7,000 for 2024), with unused room carried forward. Lifetime limit since 2009 is over $95,000 (varies by eligibility year).
- Withdraw Anytime: Flexible withdrawals at any time, for any purpose, without penalties.
- Re-Contribution: Amounts withdrawn can be re-contributed in the following year.
- Investment Options: Can hold cash, GICs, mutual funds, ETFs, stocks, and bonds.
🔹 Why Choose TFSA?
Perfect for both short-term goals (vacations, emergencies) and long-term investments (retirement, wealth building). TFSA combines flexibility, tax savings, and growth potential in one simple account.
