Tax-free savings account
A Tax-Free Savings Account (TFSA) is a tax-advantaged account that helps you save for both short-term and long-term financial goals.
The features of a TFSA include:
- Tax-free – Investment income and capital gains earned in a TFSA are not taxed, even when you withdraw money from the account.
- Eligible investments – A TFSA can hold a combination of eligible investments, such as stocks, bonds, managed portfolios, mutual funds , exchange-traded funds (ETFs), Guaranteed Investment Certificates (GICs), and cash.
- Contribution limit – The maximum amount you can contribute for 2020 is $6,000.
- Unused contribution room – You can carry forward the unused contribution amount to future years.
- Impact of eligibility on government benefits – Income earned and withdrawals made from a TFSA don't affect your eligibility for federal tax credits or income-tested benefits such as the Canada Child Benefit, Old Age Security (OAS) or the Guaranteed Income Supplement (GIS). TFSA assets and withdrawals may, however, impact provincial government benefits.
- Estate considerations – You can set up the account’s assets to transfer directly to your spouse or common law partner upon your death, by naming him or her the successor holder on your TFSA.
We can help
At Edward Jones, we can help you achieve your financial goals. Contact your local Edward Jones financial advisor to talk about a financial strategy that makes sense for you.