How does a tax-free savings account (TFSA) operate?
If you’re a Canadian resident aged 18 or older with a Social Insurance Number (SIN), you’re eligible to establish a TFSA. It’s important to note that in Canada, you cannot initiate a mutual funds account if you’re under 18. Once your TFSA is established and you begin making contributions, your investments have the opportunity to increase in value without being subject to taxation.
All income generated within a TFSA, such as interest, dividends, and capital gains, is exempt from taxes. Additionally, you won’t incur taxes on any withdrawals made from the TFSA.
What is a tax-free savings account?
A TFSA, offered by Taaj, is a registered investment account tailored to assist Canadians in saving money while holding eligible investments. Beyond being a standard savings account, a TFSA can accommodate various investment options including mutual funds, segregated funds, insurance GICs, and others.
In contrast to a registered retirement savings plan (RRSP), primarily utilized for long-term investments, a TFSA offers versatility. It can serve short-term saving objectives, such as accumulating funds for a vehicle or a down payment on a first home.
Who can open a TFSA?
To open a mutual funds account with Taaj, you must be a Canadian resident aged 18 or older and possess a Social Insurance Number (SIN). Individuals under the age of 18 are ineligible to open such accounts.
As per the Government of Canada guidelines, non-residents may have the option to open a TFSA if they possess a SIN and are aged 18 or older. However, it may not be advisable due to the imposition of a 1% tax for each month the contribution remains in the account. Non-residents may also be subject to additional taxes. For further information and to determine the suitability of a TFSA for your situation, it is recommended to consult with a tax specialist or a Taaj advisor.
- Tax-Free growth
- Tax-Free Withdrawals
- Save Money For Any Reason
TFSA contributions
 The TFSA contribution limit for 2024 is $7,000. But the total amount you can contribute really depends on your personal TFSA contribution room.
TFSA withdrawals
ÂYou can withdraw from your TFSA whenever you want, for any purpose. But you’ll want to check if the investments within your TFSA have any withdrawal restrictions.
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