Look. There’s no downside and all kinds of upside to the Tax Free Savings Account. Become a saver, already!
Here’s how it works:
1. Set up a Tax Free Savings Account at any Canadian bank you like.
2. Every year, you can put in up to $5000. But $100 is just fine too.
3. Whatever that $5000 earns, you are never taxed on. So you can go conservative and just have a high-interest savings account within your Tax Free Savings Account or you can invest in Stock (*cough* Apple anyone?) and again if that stock doubles, triples, you don’t pay tax on whatever you make. Read More…
People’s trust has theres at 3% — seems to be the highest in canada but they dont offer much in other service.
Right now for me its ING at 1.8%
Which banks offer the highest tfsa interest rates?
Not sure what you mean. It is pointless taking out the full balance and redepositing it back the next day since it just amounts to the same thing. Your limit increases $5000 each year regardless of what you placed in that previous year.
So would it be best to take out the entire balance from the account on December 31st of each year and deposit it back in on January to take advantage of making more room for the following year (giving you double the amount of room)?
I never knew about tfsa accounts until my bank told me i should consider it because of the high balance just sitting around in my chequing account.
The only real downside is if you contribute too much without realizing.
Each and every year your contribution space increases an additional $5000. But if you treat it as a standard savings account and keep putting in more than your allowed limit for that year then you are in for trouble with cra.