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Post Info TOPIC: Tax Free Savings Account
Quixote


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RE: Tax Free Savings Account
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Those details have not been well defined so I offer my opinion only

I think it will be similar to an RRSP account.  Financial instiutions will offer accounts that are specifically designated for TFSA.   I imagine that the Financial insitution will send you a receipt at the end of the year indicating how much you contributed to the TFSA account.   I also think it would be possible to open multiple TFSA accounts with different institutions as long as you don't contribute more than $5k total in the year.

I'm sure the financial institutions will start their TFSA friendly marketing campaigns late in the year and more details will be available.


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TV Buff


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I'm confused: can it be ANY account that you put 5K in or do you have to open a specific TFSA? Not that any time in the foreseeable future I will have 5K, but it would be good to know.

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I love this one too!!!
Quixote


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The investments that are eligible for TFSA are the same as RRSP. This includes stocks, GICs, bonds, etc. . In other words, you can get the same rates that PC and ING offer as long as they offer their products for TFSA.  



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Dogo


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I'm just going to guess here, but... I don't think it's actual "account" (as in a savings account), X. More of a shelter, which you can direct as you wish, and you're allowed to put in 5Gs a year, and withdraw it tax free
I could be wrong blankstare.gif

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X4v13r


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so what kind of rates are they going to give in this kind of account..... right now presidents choice gives u %3.75 rate on a savings account and IGN gives u %3.65.

~X



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Quixote


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The recent federal budget introduces the Tax Free Savings Account which will be available for use in 2009.  If you are not familiar with it, take a moment to read up on it.

http://www.budget.gc.ca/2008/plan/chap3b-eng.asp#tax-Free

Here is an excerpt


How the Tax-Free Savings Account Will Work
  • Starting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
  • Contributions will not be deductible.
  • Capital gains and other investment income earned in a TFSA will not be taxed.
  • Withdrawals will be tax-free.
  • Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
  • Withdrawals will create contribution room for future savings.
  • Contributions to a spouses or common-law partners TFSA will be allowed, and TFSA assets will be transferable to the TFSA of a spouse or common-law partner upon death.
  • Qualified investments include all arms-length Registered Retirement Savings Plan (RRSP) qualified investments.
  • The $5,000 annual contribution limit will be indexed to inflation in $500 increments.

I think this is a great idea and my only gripe, like a few of the existing tax relief programs (RRSP, HBP), the maximum amounts are too small. 

Start saving!



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