Tax-Free and Stress-Free Savings
The money you invest into a tax free savings account is taxable income, but the money that your investment earns while in a TFSA investment product, is tax free. With its flexible features, a TFSA can help you achieve short or long-term goals. You can do anything with a TFSA – withdraw money to contribute to your RRSP, set aside emergency savings, supplement parental leave income, use it as retirement income – the possibilities are endless.
Benefits of TFSAs
Get the most out of your money: tax-free!
You don't pay tax on any interest, dividends, or capital gains your investments earn.
Withdraw as much as you want, any time, and without paying tax on it.
Build a TFSA that fits your goals from a range of savings and investment options, including Term Deposits and EFTs.
Contribution and Withdrawal Rules
Follow these guidelines to make the most of your contributions:
- Maximum contribution: For 2024, the annual contribution limit is $7,000. Unused contribution room is carried forward from previous years. The cumulative total since the beginning (including 2024) is $95,000.
- Who can contribute: Canadian residents 18 years or older who have a valid social insurance number can contribute to a TFSA.
- Unused contribution room: If you have unused contribution room at the end of the year you can carry it over and use it next year.
What you need to know about taking your money out of your TFSAs
- You can withdraw any amount, any time. There may be some exceptions to this – it depends on the types of investments you have in your TFSA. For example, if you’re holding Term Deposits in your TFSA and you withdraw those funds before they mature, you may pay a penalty.
- When you make a withdrawal, you can re-contribute the same amount at the start of the next year and it doesn’t count toward your annual contribution limit.
- You don't pay any taxes on the funds you withdraw.
Frequently Asked Questions
For 2024, the annual limit is $7,000. If you have contribution room carried over from previous years, you can also use that. To find out how much contribution room you’ve carried over, you can:
- Call TIPS (Tax Information Phone Service) at 1-800-267-6999
- Visit the CRA site and log in to MyAccount
- Request a TFSA Room Statement from the CRA at 1-800-959-8281 (to check for hours of service and phone numbers for outside of Canada, visit the CRA site)
It's often easier to make smaller, regular contributions than it is to come up with a larger lump sum. This is easy to do with a pre-authorized contribution plan (PAC). A PAC automatically withdraws from one of your other BVCU accounts and adds it to your TFSA. In the end though, you can contribute any way you want – just keep an eye on the contribution limit.
To add money to your TFSA, you can:
- Deposit a lump sum
- Use a pre-authorized contribution plan (PAC) to automatically deposit a set amount into your TFSA at certain times.
Yes. You can open as many TFSAs as you want. Just remember: your contribution limit for 202 is $7,000 in total (plus any contribution room you've carried over and room created by withdrawals), regardless of whether you have one or many TFSAs.
At BVCU, through our partnership with Credential, you can add any combination of the following investments to your TFSA.
- Term deposits
- Mutual funds
- Savings accounts
If you go exceed your maximum contribution for the year, you have to pay a penalty to the CRA of 1% per month on the excess amount for as long as it’s in your account.
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*Mutual funds, other securities and securities related financial planning services are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc. Mutual funds are offered through Credential Asset Management Inc.