TFSA


A Tax-Free Savings Account (TFSA) is a great way to boost your savings and help you keep more of your money. At Diamond North Credit Union, our knowledgeable advisors are here to answer all of your questions and help you make an informed decision when choosing the right TFSA investment for you. Want to know how much a TFSA will save you? Find out using our TFSA Calculator.

Features and Benefits

  • Available to Canadian residents who hold a valid Social Insurance Number and are 18 years of age and older
  • Contributions will not be tax deductible
  • Contributions may only be made by the owner
  • Income earned and capital gains under a TFSA will be tax sheltered
  • Withdrawal of contributions and/or income will not be subject to tax
  • Annual contribution limits are set by the Canadian Government
  • Unused contribution room may be carried forward and contributed in a future year
  • Withdrawals (income and interest earned) will increase the unused contribution room for any year after the year of withdrawal

Get more information on Naming Beneficiaries, Understanding TFSAs and the Differences between RRSPs and TFSAs.

 

Tax-Free Premium Savings

  • Premium rate paid on balances over $5,000
  • Plan 24 rate paid on balances under $5,000
  • Daily interest paid monthly
  • No fees for electronic banking, in branch deposits or pre-authorized transfers
  • Transfer-out fees may apply (Contact your Investment Officer for more information)

      Term Deposits

      • 1 - 5 year terms
      • Interest paid annually
      • Compounding interest
      • Transfer-out fees may apply (Contact your Investment Officer for more information)

      TFSA Questions? Contact Us Today!

       

          3 Things to Know about Tax-Free Savings Accounts

          At Diamond North Credit Union, we’re dedicated to giving you honest, accurate and up-to-date information that helps you achieve your financial goals. And as part of this ongoing commitment, we’re highlighting three key TFSA facts that are important for you to know.

          1. You can invest your TFSA in a variety of ways – not just a savings account. 

          By having the words “Savings Account” in the term “Tax-Free Savings Account,” some people believe that the only investment they can have with a TFSA is the SA part (“Savings Account”).  But that’s not the case at all!  You can have a wide variety of investments in your TFSA, including mutual funds, GICs and bonds.

          Talk to our knowledgeable Investment Officers here at Diamond North Credit Union to learn more about your TFSA investment options.

          2. You can carry unused TFSA contribution room forward. 

          Thankfully, contributing to your TFSA is not a “use it or lose it” thing.  In other words, if you don’t maximize your contribution during any given calendar year, you will be able to carry that unused amount to the next year, the year after…and so on.

          If you have never contributed to a TFSA,  talk to a Diamond North Credit Union Investment Officer today.

          3. Beware of when you pay back any funds you withdraw from your TFSA. (Scenario is based on cumulative contribution limit reached)

          Based on the contribution limit, let’s say you deposit $5,500 into your TFSA on January 1st.  On March 1st you withdraw $3,000. This “frees up” $3,000 in contribution room.  Now, you may think that putting that money back into your TFSA is as simple as making a $3,000 deposit sometime in during the year.  That would take you back to $5,500, which is the annual limit.  Makes sense, right?

          Unfortunately, the answer is no.  According to the Canada Revenue Agency, you will have contributed $8,500 – the $5,500 you contributed in January and the $3,000 you contributed later in the year.  In other words, the CRA doesn’t recognize withdrawn amounts when it calculates your annual contribution total.  As a result of the over-contribution, the CRA will penalize you 1% for each month the excess contribution stays in your TFSA account. 

          What can you do to avoid all of this? The answer may not be all that logical, but it’s simple: if you withdraw funds from your TFSA, do not put them back until the following year. So in the scenario above, you wouldn’t put the $3,000 that you withdrew from your TFSA back into your account until next year (or any year after that).

           

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