What is TFSA?

Full form of TFSAs is Tax free savings account. It is the account for Canadians to save and invest money without paying taxes on the growth, interest, dividends earned within the account. It is a very good way to save money in Canada for the long term or short term.

Main purpose of TFSA: TFSA is made to help Canadians to save and invest money tax free. It is used to fulfill various financial goals like enjoying life, buying a house, and saving for retirement.

Benefits to save in TFSA:

• Grow tax free:  Any income you earned like interest, dividends within a tfsa you don’t have to pay tax. Which helps you to grow faster without having to pay tax on every earnings.
• Withdraw money tax free: Whenever you need money you can withdraw money from your TFSA account without paying tax.
• Wide range of investments: In TFSA access you can invest in various things like stocks, GICs, bonds, mutual funds, ETFs, including savings accounts; which helps you to manage your risk tolerance and investment goals.
• No burden to withdraw money: In TFSA you have full right to withdraw money whenever you want which provides you flexibility to save money for retirement.

Drawback to save in TFSAs:

• Limit on savings: In TFSA you can invest only a certain amount of dollars every year which are set by government authorities. Whenever you save more money than limit you face huge penalties.
• Not good for short term savings: TFSA withdrawals are tax free whenever you withdraw money directly affecting the potential growth of your investment. It’s very important to make an investment plan and avoid withdrawing money in the short term.
• No income splitting: There are many investment options like RRSP in which you can transfer your money.It means that the tax free growth in the account cannot be transferred to your spouse or partner for tax purposes.

In TFSA you can withdraw money any time without giving any reason. The amount you withdraw is added to your contribution room in the next year. The simple meaning of this is you can re-contribute the same amount you withdraw moreover with your annual contribution limit.

How many accounts we can open in TFSAs:

There is no limit for any individual they can open as many accounts they want to open under TFSAs and take advantage of different financial institutions offering.

In TFSA there is no deadline to contribute to this whereas in RRSP there are deadlines. It is a very good advantage for those who skip the dates because they can invest any time in the whole year.

How can people invest in TFSAs?

There are various ways to invest in TFSA but the best way is open account from WFG agent you can also message me on whatsapp +16725513244 i will guide you how to open the account that will open online after opening a account you have to invest funds in account then choose where you want to invest money like stocks, GICs, mutual funds, bonds, ETFs, Index funds. This way you can open an account easily.

After investing it’s your duty to check and monitor the TFSAs and also it is tax free accounts so you have to be aware about tax implications to any foreign investments.

Annual limit to invest:

In year 2024 you can invest upto $7000

Best stocks to invest in TFSAs: 

• Terravest
• Colliers international group
• Magna international

Best mutual fund to invest in TFSAs:

• TD Mutual funds TFSA
• Scotia Canadian equity fund
• RBC vision global equity fund

Best bonds to invest in TFSA:

• BMO Aggregate Bond index
• TD Canadian Aggregate long term bond index
• Ishares core Canadian short term bond index

Summary:

Investment is such an important thing in nowadays because the price of everything goes up day by day we don’t no what happens in future if we start investing money from now then we have a very good amount to spend in bad situations so start investing money in TFSAs or RRSP both have their own benefits. Contact me on WhatsApp +16725513244 to learn how to invest and also if you want to be rich message me.