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Tax-Free Savings Account

Building Wealth Tax-Free

The Tax-Free Savings Account allows Canadian residents, 18 years of age and older, to save after-tax income and pay no further taxes on those funds or their investment returns. In addition to the annual $5,500 maximum, unused contributions from prior years can be carried over and past withdrawals can be re-contributed in the following year.

Annual contribution limits:

2009-2012 $5,000
2013-2014 $5,500
2015 $10,000
2016 $5,500
2017 $5,500
2018 $5,500
2019 $6,000

Unlike an RRSP, there is no upfront tax deduction with a TFSA, but neither are the proceeds taxed when they are withdrawn.  This means interest compounds tax-free, as do capital gains and dividends generated by mutual funds and stocks.  Plus, any withdrawal you make frees up a comparable amount of new contribution room the following year – the TFSA offers full flexibility to withdraw and re-contribute.

How Do I Know It’s Right for Me?

The TFSA is attractive for any person saving for any goal, from automobiles to vacations to home renovations.  And just as RRSP withdrawals have become a key tool for first-time home buyers, the TFSA offers a unique advantage for people entering the housing market – a TFSA withdrawal doesn’t have to be repaid. 

It will also be attractive to low-income seniors, since tax-free TFSA withdrawals will not be added to income and will not trigger reductions in Old Age Security benefits or the Guaranteed Income Supplement.  There is no maximum age limit for contributing to a TFSA and unused contribution room can be carried forward indefinitely.

As with RRSPs, TFSA holders can name spouses as beneficiaries and roll the proceeds over to them upon their death.  And, as with spousal RRSPs, spouses can contribute to their partner’s TFSA.  This means couples can shelter up to $10,000 worth of new investments every year from tax.  High-income investors who may have maxed out their RRSP room can use the TFSA for additional shelter, and to receive dividends from foreign investments, which do not qualify for the dividend tax credit – there is no foreign content limit on a TFSA. 

TFSA Investment Options

Term Investments

Term Investments (GICs) give you the security of government-guaranteed deposit insurance1 and a competitive rate of interest, with available terms from 90 days to five years.

Investment Savings

Earn a high rate of interest on your savings without tying your money up for a lengthy term.  With our Investment Savings Account, there’s no minimum amount, no minimum monthly balance, and you can withdraw money anytime with no withdrawal penalty.

Mutual Funds

Get the potential for a higher return with mutual funds. Credential Asset Management Inc.2  offers a select group of the most popular funds from Canada’s leading mutual fund providers, plus the award-winning Ethical Funds family of socially responsible funds.

Wealth Management

If you’re a Member who wants to take control of creating and protecting your personal wealth, you can work with an expert at FirstOntario who understands the intricacies of investing and growing your money.  Through our Credential Securities2 Investment Advisors, we can offer you full-service investing with knowledgeable advice tailored to your unique circumstances.

Let's chat. Call us at 1-800-616-8878 or visit your local branch to book a Service Chat.

1. Deposits are insured by the Deposit Insurance Corporation of Ontario.  Insurance is limited to $250,000 per individual for unregistered investments, whereas it is unlimited for TFSAs and other registered plans.
2. Mutual funds are offered through Credential Asset Management Inc. Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual fund securities and cash balances are not insured nor guaranteed, their values change frequently and past performance may not be repeated. Credential Securities is a registered mark owned by Aviso Wealth Inc. Northwest Funds, Ethical Funds and NEI Investments are registered trademarks of Northwest & Ethical Investments L.P. Ethical Funds® are available only to Canadian residents. Credential Asset Management Inc., Credential Qtrade Securities Inc. and Northwest & Ethical Investments L.P. are wholly owned subsidiaries of Aviso Wealth Inc.

®Credential is a registered mark owned by Aviso Wealth Inc. and is used under licence. 



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