Nelson & District Credit Union will strive to provide members with solutions to help them pack responsibly for their unique life stages, like retirement, so they may reach their viewpoints. This process is called the Financial Hike.


The Tax-Free Savings Account (TFSA) allows Canadians to set money aside tax-free throughout their lifetime. Each calendar year, you can contribute up to the TFSA dollar limit for the year, plus any unused TFSA contribution room from the previous year, and the amount you withdrew the year before.

All income earned and withdrawals from a TFSA are generally tax-free. Plus, having a TFSA does not impact federal benefits and credits. It’s a great way to save for short- and long-term goals.

Who is Eligible?

Any individual who is 18 years of age or older and who has a valid Canadian social insurance number (SIN) is eligible to open a TFSA. You cannot open a TFSA or contribute to one until you turn 18; however, when you turn 18, you will be able to contribute up to the full TFSA dollar limit for that year.


  • Investment income earned in a TFSA is tax-free.
  • Withdrawals from a TFSA are tax-free.
  • Unused TFSA contribution room is carried forward and accumulates in future years.
  • Full amount of withdrawals can be put back into the TFSA in future years. Re-contributing in the same year may result in an over-contribution amount which would be subject to a penalty tax.

Important Information on TFSA withdrawals

Every year, thousands of Canadians get caught with a TFSA penalty due to an incorrect understanding of the withdrawal rules. It's important to know that:
• You can withdraw from your TFSA, depending on the type of investments held within your plan
• Except for qualifying transfers (transfers between your own TFSAs), withdrawals made from your TFSA can only be added back the following year

How to avoid a TFSA Penalty

If you make a TFSA withdrawal after having maximized your total TFSA contribution limit, re-adding the withdrawn funds in the same calendar year will be considered an over-contribution, which is subject to a penalty.

A simple way to avoid a penalty under these circumstances is to replace the funds in the following calendar year. This will allow you to take advantage of your new contribution limit (remember again to only re-contribute what the following year's limit will allow. Anything more will be considered an over-contribution).

For a better understanding on TFSA withdrawal implications, have a look at the two withdrawal scenarios the CRA has provided on its website.

Unsure of how much TFSA contribution room you have?

Understanding how much you can contribute is an important first step in avoiding a TFSA penalty. For the most up-to-date information on your TFSA contribution room, access the "My Account" feature on the CRA website or call the CRA Tax Information Phone Service at 1.800.267.6999.

Learn More

Find out more about using a TFSA. Click for more info on TFSA.

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0948859 B.C. LTD. doing business as EKC MoneyWorks, GFCU MoneyWorks, and NDCU MoneyWorks. Mutual funds and other securities are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc. Member of the Canadian Investor Protection Fund. Mutual funds and securities related financial planning services are offered through Qtrade Asset Management Inc., Member MFDA.