Tax Free Savings Account
Looking for a simple, straightforward way to make the most of your tax-free allowance? If so, our Tax Free Savings Account (TFSA) could be right for you. It’s easy to open, and you won’t pay any tax on the interest you earn.
- Earn interest daily; paid monthly
- Save up to $5,000 each tax year
- Open with a $25 minimum deposit
Features and benefits
- A tax-free return on the interest earned,
- Penalty-free access to your money*
- The option to set up regular payments into the account
- Unused amounts can be rolled over for future years
- Make contributions to a partner’s TFSA
- All Affinity TFSAs deposits are fully guaranteed.
What can you do with an Affinity TFSA?
- Start an emergency savings fund
- Save for a vacation or a new car
- Supplement your RRSP contribution room with your additional TFSA contribution room – all tax free!
- Supplement education savings. Unlike RESPs, withdrawals on TFSAs are completely tax free!*
Why would you want to consider a TFSA?
Contributing to a TFSA can be beneficial regardless of what stage of life you are in.
| If you are not working: | You can still contribute to a TFSA. Unlike RRSPs, TFSA contribution room is not tied to your income. |
| If you have a low income: | A TFSA provides flexibility and tax savings in case you need to access your money. |
| If you have a high income: | A TFSA allows you another opportunity for tax savings even if your RRSP contribution room is maximized. |
| If you are retired: | A TFSA allows you to continue to save money tax free; even if you are older than the maximum RRSP contribution limit age. |
What is the difference between a TFSA and an RRSP?
While both plans are designed to help Canadians save money while minimizing their taxes, TFSAs and RRSPs have different features and benefits. Some of the differences between the two plans are outlined in the following table:
| TFSA | RRSP | |
|---|---|---|
| Contribution tax deductible | No | Yes |
| Tax sheltered growth of investments | Yes | Yes |
| Withdrawals taxable | No | Yes |
| Spousal contributions | No | Yes |
| Unused contributions carried forward | Yes | Yes |
| Withdrawals increase contribution room | Yes | No |
| Withdrawals impact Federal government benefits | No | Yes |
| Maximum age limit | No | Yes |
| Contribution limit based on earned income | No | Yes |
Everyone’s situation is unique and it is best to ask us to determine which option is best for you.
* Withdrawals on Affinity TFSA accounts are subject to the terms and conditions of the chosen Affinity account.