1. All Canadian residents can open a Tax-Free Savings Account if they're 18 years of age or older and have filed a tax return.
2. The Tax-Free Savings Account will let you invest while not being taxed on the interest earned on investment savings.
3. A full range of investment options are available.
4. Unlike an RRSP, your contribution to a Tax-Free Savings Account will not be deducted from your income on your tax return, but the interest you earn will not be taxed -- so you get to keep what you earn.
5. The annual TFSA dollar limit can be found here
6. If you take money out of your Tax-Free Savings Account, you don't lose the contribution room -- you get it back in the following year.  This is important to remember, because if you take it out you will have to wait until the next year before you can put the money back in.
7. If you don't make the maximum contribution, you don't lose the contribution room. The unused contribution room gets carried over to the following year. There is no limit to how much contribution room can be carried forward.
8. You can hold more than one Tax-Free Savings Account with any number of financial institutions but the total of the contributions must be within your total contribution limit in that year.
9. Money you take out of your Tax-Free Savings Account will not affect federal income-tested benefits and credits, so you're not penalized for saving.
10. Each year, the government will determine and advise you of your remaining available Tax-Free Savings Account contribution limit on your Notice of Assessment.

Interest on money borrowed to purchase a TFSA is not deductible for tax purposes.

Withdrawals

TFSA Holder may withdraw funds at any time; withdrawals may be restricted by investment terms.

• Withdrawals are not reported as taxable income and are not subject to income tax.
• TFSA withdrawals of contribution/earnings will increase contribution room for future years, but not the current year.
• Withdrawals will not impact eligibility for federal income tested benefits and credits (e.g. OAS, GIS, Age Credit, GST, El, child-tax benefit, working income tax benefit).

Transfers

A TFSA is transferable to another TFSA owned by the Holder; transfers may be restricted by investment terms.

• Transferable to a spouse/common-law partner on death of the Holder.
• Transferable to a former spouse/common-law partner on relationship breakdown

NOTE: A transfer due to death will not affect the TFSA contribution room of the surviving spouse/common-law partner. A transfer due to relationship breakdown will not affect the TFSA contribution room of the Holder or former spouse/common-law partner.

Tandia investment TFSA options include:

• eVest TFSA
• Smart Savings
• 1-5 Year Term Deposits
• Index Linked Term Deposits
• Step Term Deposits

The individual owning the TFSA is the `Holder'. Any individual person (not trusts or corporations) who meets all of the following three requirements is eligible to open a TFSA:

• Resident in Canada, and
• 18 years of age or older, and
• Holds a valid Social Insurance Number (SIN)

Qualified Investments

The types of eligible investments are restricted under the Income Tax Act and include:

• Term deposits and GICs
• Variable interest savings accounts
• Credit Union shares index-linked term deposits
• Mutual funds
• Publicly traded securities
• Bonds

There are restrictions on holdings in a self-directed TFSA. Check the rules carefully if the investment is in an entity in which the Holder has a significant interest (generally more than 10%) or where there is a non-arm's length relationship.

When a Holder is no longer a resident of Canada, the following rules apply:

• The TFSA may remain open.
• No contributions may be made.
• Non-resident Holder will not accumulate contribution room.
• Withdrawals will not increase contribution room.
• If a non-resident Holder makes a contribution, the Holder is subject to a 1% per month penalty tax for each month that the contribution remains in the TFSA

If the holder becomes a resident of Canada, contribution room will commence accruing and the Holder may make future contributions.

A TFSA Holder may appoint his/her spouse/ common-law partner as successor holder and beneficiary of the TFSA. Upon death of the Holder, the spouse/common-law partner will become the Holder of the TFSA. Alternatively, the surviving spouse/common-law partner may transfer the funds to a new or existing TFSA in his/her name. There will be no impact on the TFSA contribution room of the surviving spouse/common-law partner.

The Holder may designate someone other than the spouse/common-law partner as beneficiary of the TFSA, or may choose not to name any beneficiary at all. In either circumstance, the fair market value (FMV) of the TFSA at date of death is tax-free. Any increase in value of the TFSA after date of death becomes taxable income either of the beneficiary or of the deceased's estate, depending on the circumstances and the date of payments.

Time goes faster than you think...

Saving for retirement can never happen too soon. Registered Retirement Savings Plans (RRSPs) are an essential part of a rounded portfolio that ensures you have a secure financial future. Registered Retirement Income Funds (RRIFs) are a popular form of retirement income.

Tandia has a number of safe and secure RRSP and RIFF investment options available.

Advice you can trust

Whether you’re saving for the future, preparing to buy your first home, or planning and protecting your estate. Tandia's suite of Wealth Service options can help you build a portfolio that’s tailored to your unique financial goals.

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