Five years after their introduction, there still appears to be rampant confusion about tax free savings accounts. Not just about the cumbersome rules on replacing withdrawn funds, but about the very nature of the TFSA itself.
Newcomers often end up in default TFSA plans offered by the nearest financial institution, believing they can hold nothing but interest-bearing vehicles like GICs. Since interest rates have been pitifully low over the five-year history of TFSAs, they reason they just aren’t worth it. Read More…
To this day i am amazed that most people still don’t maximize TFSA accounts to their ideal benefits. For me i have made it into an investment account and although there is a theoretical amount for tfsa accounts ($31K) i’ve been able to quadruple that because i refused to accept the 3% compound interest i would have got from a savings account and went with investing instead.
You should try the same.
I don’t think a GIC is a smart approach when discussing tfsa because you are locked in at the mercy of banks for years and usually gics (at least these past years) have been lousy.
Does the US have an equivalent tfsa thing?
Who wouldn’t want to have a tax free account? What i find funny is people still use debit cards at shops when it makes more sense to use credit cards since they have grace periods (free money, no interest during the period).
I am 35 and i still have not made use of my TFSA account. Interestingly my spouse has and she used it entirely that she decided to make use of my tfsa space too. I was iffy of her using it but i noticed that cra finds such a thing totally acceptable. Although its in my name i still dont consider myself being the one that is using it.
It’s hard to believe that its been five years since its introduction. I can’t imagine a time when it didnt exist 🙂