What is a TFSA?

A Tax-Free Savings Account (TFSA) is a government-approved account that lets you earn interest, dividends, and capital gains tax-free. Any contributions made to your TFSA grow without being taxed, and when you withdraw your funds, they are also tax-free. It’s an excellent option for individuals who want to grow their savings without worrying about paying taxes on their earnings.

Key Features of a TFSA

• Tax-Free Growth: Interest, dividends, and capital gains earned within the TFSA are not taxed.
• Flexible Withdrawals: You can withdraw money from your TFSA at any time without penalty, and the amount withdrawn is added back to your contribution room the following year.
• No Impact on Benefits: Withdrawals from your TFSA do not affect government benefits, such as social assistance or the Canada Child Benefit.
• Contribution Room: The government sets an annual contribution limit, and any unused room carries forward to future years, allowing you to catch up on contributions if needed.
• Wide Range of Investment Options: Your TFSA can hold a variety of investments, including savings accounts, GICs, stocks, bonds, and mutual funds, giving you flexibility in how you manage your funds.

Why Open a TFSA?

• Tax Advantages: You will never pay tax on the income your TFSA earns, whether it’s from interest, dividends, or capital gains.
• Accessibility: Funds in a TFSA are accessible at any time, making it a great option for both short- and long-term savings goals.
• Retirement Savings: A TFSA can be a valuable part of your retirement strategy, as it allows you to grow your savings without tax implications in retirement.
• No Age Limit: Unlike other retirement accounts, you don’t need to be a certain age to open or contribute to a TFSA. Any Canadian resident over the age of 18 can open one.
• Estate Planning: The funds in your TFSA can be passed on to beneficiaries without being subject to taxes, making it an excellent tool for estate planning.

How to Contribute to Your TFSA

Contributions to your TFSA can be made through online banking, in-branch deposits, or automatic transfers. Each year, the government sets a contribution limit, and any unused contribution room carries forward. Make sure to track your contributions to avoid over-contributing, as penalties apply for exceeding the annual limit.

Who Should Open a TFSA?

A TFSA is ideal for anyone looking to grow their savings in a tax-efficient way, whether for short-term goals like purchasing a car or long-term goals like saving for retirement. It’s perfect for individuals who want the flexibility to access their savings at any time without worrying about taxes or penalties.

How to Get Started with a TFSA

Getting started with a TFSA at Newfoundland and Labrador Bank is easy. Visit your nearest branch or apply online to open your TFSA account. Our advisors are available to help you choose the best investment options for your needs, and we’ll guide you in making the most of your tax-free savings.

Take control of your financial future today by opening a **Tax-Free Savings Account (TFSA)** with Newfoundland and Labrador Bank. Save, invest, and watch your wealth grow without the tax burden!