Tax-Free Savings Account (TFSA)
What is a TFSA?
A TFSA is savings account that individuals of age 18 or older can contribute to over their lifetime. Any contributions are not deductible for income tax purposes but the interest and dividends earned on those contributions are tax-free even when an amount is withdrawn.
Setting up a TFSA
To open a TFSA, contact your financial institution, credit union or insurance company and provide them with your SIN and date of birth. Visit their website to find out any other supporting documents they may require.
Contributions
The maximum amount you can contribute to a TFSA during a year is known as your contribution room. For 2019, the TFSA contribution limit is $6,000. If you contribute more than this limit you will be subject to a 1% tax on excess contributions each month until the excess amount is withdrawn.
