Tax-Free Savings Accounts
Your piggy bank will grow and grow when you invest in a Tax-Free Savings Account (TFSA) at Alterna. And you can keep it all. You can save for whatever you like—a new car, home renovation, vacation, or a rainy day—and you will not owe tax on the interest you earn.
If you’re going to save, why not save tax-free?
Select from our high interest Investment Savings Account, or a 1, 3 or 5-year Fixed Term Deposit at a great rate.
No administration, withdrawal or transfer fees!*
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. Talk to us about your investment strategy.
Want to learn more about this great new way to save?
Bury your nose into the details found below, then ask us for advice about your investment strategy. You’ll be laughing all the way to the piggy bank.
WHO CAN BENEFIT FROM A TFSA?
All Canadians with a valid Social Insurance Number and at least 18 years of age may hold a TFSA.
There is no maximum age—a real benefit for seniors who must withdraw from RRSP savings.
Those wishing to ‘park’ their money before committing to another type of investment.
Anyone who wishes to save and keep what they earn!
CONTRIBUTIONS
You can only contribute to your own TFSA.
Contribution limit is not tied to income.
$5,000 is the maximum contribution limit for each year, beginning in 2009.
In subsequent years, the $5,000 contribution limit may be increased in $500 increments depending on the rate of inflation. This means the limit will increase some years, but not every year.
Contributions are not tax deductible.
Little piggies love to eat, but don’t overdo it! It is your responsibility to ensure you do not 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. Ouch.
UNUSED CONTRIBUTION ROOM
If you do not maximize your contribution in a given year, the remaining ‘contribution room’ accumulates to 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 are able to 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. |
WITHDRAWALS
You may withdraw from your TFSA,**but keep in mind that you are 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 (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 application).
TFSAs are individual investments and are not able to be set up as joint investments.
Spousal contributions are not permitted.
Start saving tax-free today with an Alterna TFSA! Call us or visit a friendly branch near you.
* Subject to change.
** Funds accessible within two days for non-standard withdrawals.
Ask us about TFSA terms and conditions.