Tax Free Savings Acounts (TFSA)

[JLM]

Hi, folks.

I came across mention of TFSA's the other day and it got me curious. What exactly are they?

Anybody in these forums know more about them? Can anybody just open an account and say they want it to be a TFSA? Are there any restrictions? How do they differ from an RRSP?

(I am going to do some additional research on my own, but it would be good to have the info also posted in these forums.)

That strikes me as the next thing to an oxymoron. If you are talking income tax, you only pay income tax on income, and considering the pitiful amount of interest paid on savings accounts, once any sane person has more than a few dollars accumulated in one even the most cautious person would switch it over to an MMF or G.I.C.

 

[SirJosephPorter]

That strikes me as the next thing to an oxymoron. If you are talking income tax, you only pay income tax on income, and considering the pitiful amount of interest paid on savings accounts, once any sane person has more than a few dollars accumulated in one even the most cautious person would switch it over to an MMF or G.I.C.

JLM, my understanding is that you can hold just about any type of investment in the account, not just the bank account. You can hold stocks, bonds, GIC, just about anything within the account; any income generated is tax free.

I think it is a great vehicle for younger people to build up huge sums of money tax free; it is a great retirement tool. I did some rough calculations. If you put in 5000 $ every year for 30 years and on the average get a 6% rate of return (which is a modest expectation over such along item period, and quite reasonable), You will end up with about 500,000 $ (half a million) at the end of 30 years, tax free.

I only wish they had it when I was a youngster.

Oh and MIT, welcome to the forum. I am SirRupertMargartroyd, in case you didn’t figure it out.

 

[mit]

SIRRUP - aka - SIRJoe - Hard to miss your writing - Nice picture! - not sure what the members level means - ie nominee or Electoral - I see you are in the steel cage already - I am in the middle of a home renovation - energy savings I hope but can't resist the politics of late and the economic crisis - Nice to see a few familiar names and posters here.
Cheers
All

 

[SirJosephPorter]

SIRRUP - aka - SIRJoe - Hard to miss your writing - Nice picture! - not sure what the members level means - ie nominee or Electoral - I see you are in the steel cage already

MIT, I found the picture on the internet, it really is a photograph of Sir Joseph Porter from one of the performances of ‘HMS Pinafore’.

I think members levels depends upon how many messages you have posted. I started out as a nominee member (I assume everybody does) and a few days later, became electoral member. I don’t think it has any more significance than that.