TFSA’s offer a unique way of savings with a competitive interest rate. This account is registered with the Government of Canada and growth in the acocunt is tax sheltered. The Government determines the amount that you can deposit into a TFSA each year. This is ideal for saving for short or long term goals as you to withdraw your money at any time without penalty.
- Earnings are tax sheltered
- Access to funds anytime
- Guaranteed principal
- Contributions are not tax deductible
- Withdrawal of contributions is not taxable
- Unused contribution room will accumulate each year (ie. if you don’t contribute the maxium each year, unused contribution room will always carry forward to the following year)
- Withdrawal of contribution increases the contribution room for future years (ie. if you withdraw $500 from your TFSA this year, you have an extra $500 in contribution room the following year)
- 2009 – 2012: $5,000
- 2013 – 2014: $5,500
- 2015: $10,000
- 2016 – 2018: $5,500
- 2019 – 2022: $6,000
- 2023: $6,500
We recommend tracking your contribution room each year with your notice of assessment from the CRA.
Contributions over the Limit
At any time in the year, if you contribute more than your allowable TFSA contribution room, you will be considered to be over-contributing to your TFSA and you will be subject to a tax equal to 1% of the highest excess TFSA amount in the month, for each month you are in an excess contribution position.
*Note that it is the responsibility of the TFSA holder to ensure they do not exceed the annual maximum contribution limit. We recommend tracking your contribution room each year with your notice of assessment from the CRA.
MCU also offers TFSA GICs which provide the option to earn more while guaranteeing the amount you have invested. With terms ranging from 1 to 5 years, you have the opportunity to earn more at a higher rate of interest than the savings account.
Click here to see our current TFSA rates.