Tax Free Savings Accounts

A New Approach to Your Savings

Starting January 1, 2009 you can open a Tax Free Savings Account (TFSA) at Revelstoke Credit Union.

The TFSA is a flexible registered savings plan that can help you meet your unique savings and investment goals short and long term. Within your TFSA, you can hold a number of different products (such as a savings account, term deposit, and mutual funds*) similar to RRSPs.

Any individual who is a resident of Canada, 18 years of age or older, and who holds a valid Social Insurance Number is eligible to open a TFSA. There is no maximum age limit and a person may hold more than one TFSA.

Talk to us today about setting money aside in eligible investment vehicles, so you can watch those savings grow tax-free!

Details

  • $5,000 is the maximum TFSA contribution limit for 2009. (After 2009, the maximum contribution may be increased depending on the rate of inflation.)
  • Contributions are not tax deductible.
  • The holder of the TFSA is responsible for ensuring the maximum contribution limit is not exceeded. The Canada Revenue Agency will confirm the contribution room on the annual Notice of Assessment.
  • Unused contribution room will accumulate each year.
  • Unused contribution room is carried forward indefinitely.
  • A TFSA withdrawal will increase the contribution room for the year after withdrawal.

Benefits

  • There are no restrictions on the way TFSA funds (contributions AND earnings) may be used (eg. purchase a car, renovate your home, start a small business, take a vacation). You can make withdrawals at any time (withdrawals may be restricted by investment terms) and for any reason tax free.
  • All income levels may benefit from a TFSA.
  • Any income or capital gains earned in the TFSA will not be taxed.

Special Features

  • TFSA withdrawals will not impact your eligibility for federal income-tested benefits and credits, such as the Canada Child Tax Benefit, OAS, GIS, GST, EI, and working income tax benefit.
  • You will have the option to transfer your TFSA assets to your spouse or common law partner upon death without any impact on the survivor's existing contribution room.

Questions, Answers and a Calculator

For more information, check out the Canada Revenue Agency website with frequently asked questions and answers:

http://www.cra-arc.gc.ca/gncy/bdgt/2008/txfr-eng.html

You can also estimate how much money you could save by clicking on the calculator built by the Government at: http://www.budget.gc.ca/2008/mm/calc_e.html.

 

* Mutual funds are offered through Credential Asset Managment Inc.