TFSAs - Tax-Free Savings Accounts
The TFSA is a Tax Free Savings Account that was made available as of 2009. The TFSA is a flexible, general purpose savings vehicle where interest and income earned is protected from taxation, even when withdrawn. UCU offers this product as either a savings account or term deposit.
Key benefits of the Tax-Free Savings Account:
- Available to Canadian residents only, who are 18 years or older and hold a valid Social Insurance Number (SIN)
- The current annual contribution limit is $6,000.00 tax-free
- As of January 1, 2021 the lifetime maximum you can have invested in a TFSA is $75,500. The maximum for 2020 is $69,500
- Any unused contribution room can be carried forward to future years
- Withdraw money without being taxed
- The withdrawn amounts can be re-contributed at any time after the year of withdrawal
- Neither income earned in a TFSA nor withdrawals will affect eligibility for federal income-tested benefits and credits
- TFSA contributions are not tax deductible
Knowing how much you can contribute is an important first step in avoiding a TFSA penalty. For the most up-to-date information on your TFSA contribution room, access the "My Account" feature on the CRA website or by calling the CRA Tax Information Line at 1.800.267.6999.