Published December 31, 2018 • 3 Min Read
Eligibility
As a newcomer, you benefit from the fact that you don’t need earned income to save or invest in a TFSA. There is, however, a maximum amount of money you can deposit into your TFSA each year. All Canadian tax residents who are at least 18 years of age have the same contribution room of up to $6,000 a year. You must be the age of majority in your province of residence and have a valid Social Insurance Number to open an account.Contributions
You don’t need to have the full $6,000 to get started. Unused contribution room accumulates and can be carried over from year to year. If you withdraw from your TFSA, the full amount of your withdrawals can be put back in future years. Just be careful, as re-contributing in the same calendar year can result in an over-contribution that is subject to penalty tax.Tax Benefits
Income earned and TFSA withdrawals are not included as income for tax purposes. This means the TFSA offers a high degree of flexibility and will help to minimize your income tax. The money you deposit to your TFSA can help you achieve your short, medium or long term goals. A TFSA can be a great way to help save for your future. Talking to a financial advisor can help you understand the benefits of a TFSA and the investment options available to you.This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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