The TFSA Explained in 3 Minutes

19 Comments

Find the TFSA confusing? I explain what it’s all about in less than 3mins. So take a break from whatever you’re doing and watch below!


19 Comments

  1. How am I the first to comment on this!?

    Anyways, you said there are no taxes until you withdrawal the funds. Are you taxed on the interest you made once you withdrawal? Do they charge you fees? How does that work?

    -Hannah 🙂

    • You are never taxed on what you earn within the TFSA, hence the name tax-free =)

      There are no fees or penalties at any time you make a withdrawal. You can take money out whenever you please!

  2. Do you think a RRSP is a good place to start saving for a home downpayment, instead of a TFSA? What if you contribute to a defined benefit pension plan?

  3. alana

    Hey Bridget, do you have to be a citizen or permanent resident to open a TFSA and are there any minimum income requirements for opening one? Just finished grad school so I’m now on a work permit while I wait for my PR to be processed. Would be great if I could move my money to a TFSA.

  4. Laurence Côté

    I was 20 in 2009. So that means I can put at least 30 000$ without paying fees or penalties? I remember putting cash in a TSFA account but it was max 5k so I can put 20k without major problems? And if I understood correctly, I should put that money in a Tax-Free Investment Fund Account?
    Thanks for the video!

    • If you were 20 in 2009, you have $41,000 of contribution room.

      If you already contributed $5,000 you can contribute an additional $36,000 now without penalty.

      On January 1, 2016 your contribution room will increase to $46,500 so you will be able to contribute up to that amount!

      • Laurence Côté

        Wow, thanks for the fast response. So, I can put 8000$ per year in that account even if the limit is 5000, until I reach the 36,000$ limit?

        Just opened a Tax-Free Investment Funds ( I had one that wasn’t TSFA) and will try to put as much money as I can in there. 🙂

        • Yep! The limit is a lifetime limit, so if you do not contribute or only contribute a small amount one year, your unused contribution room carries over to the next year!

  5. Viv

    how about withholding tax on US equity in TFSA?

    • US witholding tax is 15-30% and will be taken off before the dividends hit your TFSA. You can reclaim it by filling out a form to the IRS, but the money you reclaim cannot be put back into your TFSA without taking away from your contribution rooms.

      This is one reason it is more attractive to hold international investments under the RRSP rather than the TFSA!

      • Jonathan

        Hi Bridget,

        Can you please provide more details on how one would go about reclaiming withholding taxes on US investments? I understand that by filling out W-8BEN you can have withholding taxes reduced to 15% but I can’t find anything on being able to reclaim the full amount withheld.

        Thanks

  6. Judy lau

    If I only contributed 5500.00 in 2015 can I put in 15,000 now