TFSA/Best Canadian Tax Free Savings Account for Beginners
In this video I am revealing a complete overview about TFSA accounts with all the blows and whistles this phenomenal financial tool can provide.
Back in 2009, Government of Canada introduced new TFSA - Tax Free Savings Account in order to encourage and motivate people to start saving and providing them with tax incentive, since they will be saving money already taxed.
There is a certain contribution room announced every year by CRA which determines your maximum contribution room every year.
In case you overcontribute in your TFSA account, you will be chare 1% interests on the entire excess amount until you withdraw it again.
If you have never had a TFSA account before (you can also have multiple TFSA accounts with different banks or brokerages) and you will open up one this year, your total contribution room is $81,500. This amount is available to you and you can use it either with a one time deposit and by starting saving regularly into your TFSA account.
Contribution room for 2022 is $6,000.
TFSA 's provide high flexibility and fairly quick accessibility of your funds as well. In case you need to withdraw anything, you don't loose this contribution room and can recontribute this amount again next year along with whatever new contribution room will be available.
Your current TFSA account can also be transferred to another bank or brokerage.
Any capital gains, dividends or interests from or in your TFSA are tax free.
If your portfolio generates monthly dividends, this income is fully tax free and get to enjoy the money.
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Take care!
Norbert
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