What is a TFSA?
A tax-free savings account is ideal for medium- or long-term savings projects. The returns generated in the account are not taxable, even if you make a withdrawal. Additionally, your money can be accessed at any time, which makes it an excellent emergency fund.
Key advantages of the TFSA
- The income earned on your contributions to the TFSA is not taxable.
- Withdrawals are not taxed and may be made at any time, which makes it an excellent emergency fund.
- Unused contribution room is carried over to the following year, which means that you can contribute more than your annual limit.
- This is the ideal solution for your medium- and long-term savings projects, like a trip or the purchase of a home or car.