TFSA

Tax-Free Savings Account

As of January 2009, MemberOne members have the option of investing in Tax-Free Savings Accounts (TFSA). You can even contribute through payroll deductions!  MemberOne has flexible investment options to help you take advantage of this tax-free savings program.

What is the Tax-Free Savings Account (TFSA)?

In the 2008 Federal Budget, the Government of Canada announced a new Tax-Free Savings Account (TFSA) which will allow your savings to grow and earn tax-free income. In January 2013, Canadian residents who are 18 years of age or older can contribute up to $5,500 per year to a TFSA.

Who is Eligible?

You can open a TFSA at MemberOne Credit Union if you are an individual Canadian resident, aged 18 or older, and have a Social Insurance Number (SIN).

So how does a TFSA work?

You can save up to $5,500 annually in a TFSA account and you will not owe tax on the interest you earn. That is because your money will grow and the interest will not be considered income that you must claim on your tax return.
And, if you don’t contribute the maximum amount in a particular year, you will be able to carry forward your unused contribution room and contribute it in future years. 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.

Can I withdraw funds from a TFSA?

You can withdraw funds from your TFSA at any time and for any purpose.  However, if you select a Non-Redeemable Term Deposit Investment option, the funds will be locked in for the length of the term and you will not be able to withdraw them until the term matures.  You can recontribute the withdrawn amount starting in the following year.

What are my MemberOne investment options?

  

You can choose a Variable Rate Tax-Free Savings Account, Redeemable Term Deposit, or Non-Redeemable Term Deposit from 6 months to 5 years in length.  Our rates can be found here - they are the same as our rates for RRSPs and RRIFs. 

Click here for further information from CRA, and watch this page for updates.  Rates may be changed frequently and without advance notice.

 

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