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Now is the Time To Open Your Tax-Free Savings Account
Frequently Asked Questions
Eligibility
Q. Am I eligible to open a TFSA?
A. Yes, as long as you are a Canadian resident who is 18 years of age or older, and hold a valid social insurance number you can save up to $5,000 every year in a TFSA.
Q. Can I hold more than one TFSA?
A. Yes, however your total contributions across all TFSAs cannot exceed your TFSA contribution room.
Contributions
Q. How much can I contribute to the TFSA in 2010?
A. In 2010, the TFSA contribution limit is $5,000.
Q. How much can I contribute to the TFSA in future years?
A. Contribution totals include three parts:
1. The annual contribution limit, which was $5000 for 2009, but starting in 2010, and each year thereafter, the TFSA limit may be indexed to inflation and rounded to the nearest $500;
2. Any withdrawals made in the previous year, and
3. Any unused contribution room from the previous year
There is no limit on either the amount of contribution room that can be carried forward or on the number of years the amount can be carried forward. The TFSA also has no lifetime contribution limit.
Q. How can I find out what my TFSA contribution room is for a given tax year?
A. If you file an annual T1 tax return, The Canada Revenue Agency (CRA) will report TFSA contribution room on the Notice of Assessment.
Q. What happens if I exceed my contribution room?
A. Excess contributions will be charged a penalty tax of 1% per month for each month until the excess amount is withdrawn.
Account and Investment Types
Q. Can I open a TFSA in joint names with another person, a spousal TFSA, a TFSA in trust for my children or a TFSA in the name of my corporation?
A. No. Only individual TFSAs are permitted according to legislation. Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death.
Q. What are investment vehicles will Peoples Credit Union be offering as a TFSA?
A. There are several investment products available for your TFSA including:
Fixed Term Deposits -1 yr to 5 yr
Index-Linked Term Deposits 3 or 5 year
TFSA Savings Account
Withdrawals and Transfers
Q. Can I make withdrawals from the TFSA?
A. Yes, you can withdraw any amount from the account at any time for any reason.
Q. Can I transfer my TFSA from one financial institution to another?
A. Yes, a TFSA can be transferred between financial institutions, however a transfer fee may apply.
Q: Is the transfer of a TFSA between financial institutions treated as a withdrawal or contribution?
A: No. As long as the transfer between financial institutions is processed as a direct transfer, it will not be considered a withdrawal or contribution.
Tax Implications
Q. Are contributions to the TFSA tax-deductible?
A. No. Unlike RRSP contributions, TFSA contributions are not tax-deductible. The money placed into a TFSA is after-tax money, and as such, withdrawals are also not taxed.
Q. Will there be any impact on my taxes and federal government income-tested benefits if I withdraw funds from my TFSA?
A. No. Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.
Visit or call your branch today for more information:
Stroud Branch, 8034 Yonge Street, Innisfil ON 705-436-1910
Alcona Branch, 1040 Innisfil Beach Road, Innisfil ON 705-436-6005
Tollendale Branch, 274 Husrt Drive, Suite 102, Barrie ON 705-719-4460
Shelburne Branch, 133 Owen Sound Street, Shelburne ON 519-925-3204
Additional information and calculators may also be found at this Government of Canada Website
Tax-Free Savings Account
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