CWB Canadian Western Financial

Tax-free savings account

Allowing you to achieve both your short-term and long-term goals

Family in front of home

A tax-free savings account (TFSA) is a great product to explore because:

  • you don’t have to pay taxes on the investment income or growth earned on the money within your TFSA.
  • it allows you to grow your money faster.
  • it provides you with flexible access to your funds.

A TFSA is a registered investment account in which all growth on the money invested within it to be tax free. It allows:

  • an annual contribution limit of $5,500 - increased to $10,000 in 2015. (Unused contribution room to be carried forward into future years.)
  • tax-free withdrawals to be made at any time.
  • the withdrawn amount can be contributed in the following calendar year.
  • You are able to save for any purpose.
  • Contributions are not tax deductible.
  • Any Canadian resident 18 years of age or older with a Social Insurance Number can open a TFSA.
  • All types of investment income earned within the TFSA are tax-free (interest income, dividends and capital gains).
  • The TFSA contribution limit for 2015 has increased from $5,500 to $10,000.
  • The TFSA contribution limit for 2014 was $5,500.
  • The TFSA contribution limit for 2013 was $5,500.
  • The annual TFSA contribution limit for 2009 to 2012 was $5,000.
  • Contribution room is never lost and can be carried forward.
  • Your contribution limit for the year can be found on your T1 Notice of Assessment.
  • Contribution room starts to accumulate from the age of 18 or from 2009, whichever is most recent.
  • Contributing more than your limit will result in penalty of 1% per month on the excess amount, charged by the Government of Canada.
  • Contribution limits are subject to revision by the Government of Canada.
  • Withdrawals can be made at any time (some restrictions may apply depending on the investment chosen).
  • No taxes are paid on any withdrawals and withdrawals do not affect federal income benefits or tax credits you may be receiving.
  • Full amounts of withdrawals can be re-contributed in the following calendar year.