Tax-Free Savings Account (TFSA)

A TFSA helps you set money aside throughout your life, with any investment income you earn typically tax-free. Each calendar year, you can contribute up to the annual TFSA dollar limit, plus any accumulated TFSA contribution room from previous years.

It’s a great way to save for any goals you have – a new car, a home down payment, that dream vacation, you name it!

Eligibility

Anyone over 18 with a valid Canadian social insurance number (SIN) can open a TFSA.

Advantages

• Save faster – Because your TFSA is tax-free, all your investment earnings stay in your pocket.
• Use it for any goal – Your TFSA isn’t tied to a specific goal, so you can withdraw money anytime without repaying.
• Build contribution room – Unused contribution room can be carried forward to use in future years.
• Carry over withdrawals – Any withdrawal you make adds extra contribution room to the following year.
• No age limit – Unlike the RRSP, you can contribute to your TFSA from the age of 18 onwards for as long as you like.
• Flexible investing options – Your TFSA can hold a number of investments, including term deposits.

Registered Retirement Savings Plan (RRSP)

An RRSP helps you invest money when you can most afford it – during your peak earning years – to build up a comfortable retirement fund. Your contributions, within limits, are tax deductible and the income earned is tax-sheltered.

It’s an excellent way to save for your future retirement, while reducing the taxes you owe today! 

Eligibility

Anyone with earned income taxable in Canada can contribute to an RRSP.

Advantages

• Reduce your tax – RRSP contributions reduce your taxable income, which is especially helpful during your peak earning years.
• Save faster – Because your RRSP is tax-deferred, your earnings will be tax sheltered until you withdraw them in retirement – likely in a lower tax bracket.
• Contribute until you’re 71 – Make annual contributions until December 31 of the year you turn 71.
• Use a portion for your first home without penalty – Speak to us to learn more.
• Flexible investing options – Your RRSP can hold a number of investments, including term deposits.

Registered Retirement Income Fund (RRIF)

An RRIF is a flexible income-producing investment that shelters your savings from tax, while allowing you to withdraw funds as needed during retirement.

It’s a great retirement income option, giving you flexibility to decide how much money to draw while minimizing the tax you pay.

Eligibility

Anyone getting ready to retire, who wants peace of mind they’ll be able to enjoy the lifestyle for which they’ve carefully planned.

Note: The government requires that you collapse your RRSP by the end of the year you turn 71. Your choices may include taking it all in cash, which will be subject to tax, or converting the funds to a retirement income option such as an RRIF.

Advantages

• Tax-sheltered growth – Your investments continue to grow tax–sheltered, working hard for you.
• Control your income – You can manage the amount and frequency of your withdrawals, subject to the legislated minimum annual payment requirements.
• Tax-free transfer to spouse – You can pass your RRIF assets on to your spouse tax-free when you die.
• Flexible investment options – You have the option of converting to a more secure guaranteed income at any time.

First Home Savings Account (FHSA)

The Tax-Free First Home Savings Account (FHSA) is an investment arrangement available to Canadian first-time home buyers that allows a tax advantage option to save for a down payment. Contributions to an FHSA are deductible from income, like an RRSP, while income and gains are tax-free, like a TFSA.

Eligibility

Any Canadian first-time home buyer over the age of 18 with a valid Canadian social insurance number (SIN) can open an FHSA.

Advantages

• Save faster – Gives prospective first-time home buyers the ability to save up to $40,000 on a tax-free basis for up to 15 years.
• Build contribution room – An $8,000 annual contribution limit, $40,000 lifetime contribution limit.
• Build on the options – Both the FHSA and the Home Buyers Plan (RRSP) can be used for the same qualifying home.
• Flexible – Savings not used to purchase a qualifying home can be transferred to an RRSP or RRIF.
• Inclusive – Available to Canadian residents 18 to 71 years of age.