TFSA – Tax-Free Savings Account
The tax-free savings account (TFSA) can be a good savings tool to grow your money in a tax shelter, 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- Grow your savings in a tax shelter: the income generated and amounts withdrawn are non-taxable.
- You can make withdrawals for any amount at any time and without penalty, and the amounts withdrawn can be redeposited starting the next year.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- There are no restrictions on how you use the amounts withdrawn from your TFSA.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. The annual TFSA limit for the year 2020 is $6,000.