Tax-Free Savings Account
Tax-Free Savings Account
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.
There are monthly no administration, withdrawal, or transfer fees within Alterna!*
It’s easy—set up an auto-transfer to your TFSA and build your savings over time
The TFSA is great complement to your RRSP
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
2014 & 2013
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, 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: This year, 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 the next year 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 Old Age Security, Guaranteed Income Supplement, Age Credit, Employment Insurance, child-tax benefit, or working income tax benefit
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
* Fees for the transfer of a TFSA plan to another institution still apply
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