Tax-Free Savings Accounts (TFSAs) | Coastal Financial Credit Union

What is a TFSA?

A TFSA is your ticket to stashing cash tax-free. If you're 18+ and have a SIN number, you're in the club. Launched in 2009, TFSAs are all about growing your money without paying taxes on savings income.

Think RRSPs are the only way to save? Think again! TFSAs don't trim your taxable income, but they do one better: shield your savings from taxes, and let any earnings inside bloom tax-free. Plus, you can dip into your TFSA funds whenever, without a tax hit. It's like your money's best friend – keeping it safe and letting it multiply, all while staying cool with the tax folks.

Why invest in a TFSA?

Save tax free

Interest and investment income earned in a TFSA isn’t taxed, accelerating your savings growth.

Withdraw anytime for anything

You can take money out for any goal at any time without penalty, and re-contribute it the following year.

Carry forward unused amounts

You can contribute up to $7,000 to your TFSA annually, with any unused amount rolling over to the next year.

Invest your way

Your TFSA can hold a variety of investments, including term deposits and even savings accounts.

Rules for Contributing to and Withdrawing from a TFSA

Who can contribute to a TFSA?

Any Canadian resident who is at least 18 years old and possesses a Social Insurance Number (SIN) is eligible to make contributions to a Tax-Free Savings Account (TFSA). Unlike an RRSP, earning employment income is not a prerequisite for contributing to a TFSA.

For individuals over 18 who have not yet made contributions to a TFSA, there is an option to carry forward any unused contribution room, with this allowance dating back to 2009.

TFSA withdrawal rules

You have the flexibility to withdraw funds from your TFSA at any time for any purpose. The income earned on your investments within the TFSA is not subject to taxation upon withdrawal. However, if you withdraw a certain amount, you cannot recontribute that same amount within the same calendar year. The withdrawn amount will be reinstated to your contribution room in January of the subsequent year.