Tax Free Savings Account
Effective January 1, 2016 the maximum TFSA contribution limit for 2016 has been decreased from $10,000 to $5,500. Accumulated contribution room will not be lost due to this change.
When you invest in a Tax-Free Savings Account (TFSA) at Alterna, your money will grow, and you can keep every penny of it. Save for whatever you like — a new car, a home renovation, a vacation, a rainy day — knowing that you won’t have to pay any tax on the interest you earn.
If you’re going to save, why not save tax-free?Look into Alterna's TFSA solutions:
Want to learn more about this great way to save?
Please read the details below, At Alterna we want to help you make your money work as hard as it can for you.
Who can benefit from a TFSA?
- All Canadians with a valid Social Insurance Number who are at least 18 years of age may hold a TFSA
- Seniors who must withdraw from RRSP savings—there is no maximum age for holding a TFSA
- Those wishing to ‘park’ their money before committing to another type of investment
- Anyone who wishes to save and keep what they earn!
- You can only contribute to your own TFSA
- Contribution limit is not tied to income
- Contributions are not tax deductible
|$5,500||2014 & 2013|
|$5,000||2012 - 2009|
Don’t overdo it. Take care not to invest beyond your own contribution limit. For each month that an over-contribution remains in your TFSA, Canada Revenue Agency (CRA) will charge a penalty tax of 1% per month on the excess amount. Just be sure that you don’t contribute more than your yearly limit allows.
Unused Contribution Room
- If you don’t maximize your contribution in a given year, the remaining ‘contribution room’ accumulates and can be used in future years
- CRA will confirm your contribution room on your Notice of Assessment
- Unused contribution room is carried forward indefinitely, so you can ‘catch-up’ in future years
- You can take money out of your TFSA. The withdrawal will increase your contribution room for the following year
Example: In 2009, Sarah invests $5,000 in a TFSA. Later that year, she withdraws $3,000 for a vacation, but her plans change and she is not able to go. Since Sarah has no unused TFSA contribution room left, she will have to wait until 2010 to deposit the $3,000 back into her TFSA.
- You may withdraw from your TFSA**, but keep in mind that you’re bound to the terms of your investment product
- Withdrawals are not reported as taxable income and are not subject to income tax
- Withdrawals will not impact eligibility for federal income tested benefits and credits such as OAS, GIS, Age Credit, GST, EI, child-tax benefit, or working income tax benefit
Restrictions and Transfers
- The amount inside a TFSA is transferable to another TFSA owned by you (but may be restricted by the terms of your investment product)
- A person may hold more than one TFSA, but must abide by the annual contribution limit
- A TFSA is transferable to a spouse/common-law partner on the break-down of a relationship or on the death of a holder (must be named as successor holder on the application)
- TFSAs are individual investments and are not able to be set up as joint investments
- Spousal contributions are not permitted
You can start saving tax-free today with an Alterna TFSA. Ask us about the best TFSA for you.