TFSA – Tax-Free Savings Account
The tax-free savings account (TFSA) is the ideal savings tool to grow your money in a tax shelter for a personal project, since the amounts invested are available at all times.
TFSA features and benefits
- Grow your savings in a tax shelter: the income generated and amounts withdrawn are non-taxable.
- You can make withdrawals for any amount at any time and without penalty, and the amounts withdrawn can be redeposited starting the next year.
- Unused contribution room accumulates indefinitely.
- You can assign TFSA assets to guarantee a loan.
- There are no restrictions on how you use the amounts withdrawn from your TFSA.
- The maximum annual amount that you can pay into your TFSA is set by the federal government each year and is independent of income. It was $5,500 in 2016.