Tax Free Savings Account (TFSA)

 
 

TFSA is a new kind of registered account introduced by the Government of Canada in the 2008 Federal Budget. It allows individuals residing in Canada to save or invest money without paying tax on the income earned on the TFSA.

Canadians aged 18 and older with a Social Insurance Number can open a TFSA starting in 2009.

Each individual can contribute up to $5,500 annually and any unused contribution room is carried forward.

Qualified investments for TFSA would be the same as the qualified investments for RRSP.

Interests and capital gains earned on a TFSA will not be taxed, and contributions to a TFSA are not tax deductible.

Unused TFSA contribution limit can be carried forward to future years; no upper limit for accumulated contribution limit.

Over contributions will be subject to tax of one percent per month, for each month that the excess remains in a TFSA.

Withdrawal from a TFSA can be made at any time for any purpose. Do not need to provide valid I.D. if the signature matched with our Bank's record. Except the authorized person, our Bank does not allow any third party on behalf of account holder doing banking activities.

The amount withdrawn can be put back in the TFSA at a later date without reducing the contribution limit.

Income earned in and withdrawals from a TFSA will not affect the person's eligibility for federal income-tested benefits and credits (for example, the Canada Child Tax Benefit, the General Sales Tax credit, and the age credit).

Only individual account will be opened. Joint TFSA account is not allowed, similar to RRSP rules and spousal contribution does not apply to a TFSA.

An individual may hold more than one TFSA.

Assets in a TFSA can be used as security for a loan. Only the account holder can pre-designated a beneficiary or beneficiaries.

Assets in a TFSA can be transferred to a spouse upon death of the account holder.

If the person become a non-resident later, his/her TFSA can be maintained and tax-free on any earnings in the account or withdrawals; however, no contribution room would accrue for any year throughout his/her non-resident status.

TFSA - CAD Savings Account

Tired interest rate structure offers higher return on larger daily closing balances.

Interest is calculated on the daily closing balance and is paid semi-annually at the end of June and December. Our Bank may adjust interest rate according to market situation, please call our branches or refer to our "Rates and Fees" for details.

A semi-annual statement is provided.

No minimum balance requirement.

No monthly administration or transaction fees.

A charge is levied for each full or partial transfer to another financial institution or each withdrawal from an account within one year of initial deposit. A service fee of C$50 will apply for each full or partial deposit transfer to another financial institution or withdrawal from an account within one year of initial deposit. No service fee for deposit transfer within accounts in our Bank.

Eligible for coverage under Canada Deposit Insurance Corporation (CDIC).

TFSA - CAD Term Deposit

A term deposit that provides customers with a guarantee principal and predictable returns.

Choice of terms ranging from 6 months to 5 years. Our Bank may adjust interest rate according to market situation, please call our branches or refer to our "Rates and Fees" for details.

Interest is compounded annually and is payable at maturity.

A semi-annual statement is provided.

A minimum initial deposit of C$500 is required.

A service fee of $50 will apply for each full or partial deposit transfer to another financial institution or withdrawal from an account within one year of initial deposit. No service charge for deposit transfer within accounts in our Bank.

Eligible for coverage under Canada Deposit Insurance Corporation (CDIC).