Skip to content

bargainblog.ca

saving since 2018

  • Home
  • About

Tag: TFSA

Posted on May 5, 2022May 5, 2022

Should I Open a TFSA Today?

A piggy bank to highlight article about TFSA

Should I open a TFSA? It’s an interesting question as it seems to be all the rage right now. It seems like an easy way to save money. However, before getting a TFSA, you should know a few things about it first.

What is a TFSA?

It is a tax free savings account. This means that whatever money you put in it, the interest, dividends and capital gains earned in this account is tax free for life. You can withdraw money from it at anytime and the money withdrawn is tax free!

What can I have in a TFSA?

You can have a wide range of investments inside of a TFSA such as:

  • cash
  • mutual funds
  • securities listed on a designated stock exchange
  • guaranteed investment certificates
  • bonds
  • certain shares of small business corporations

Advantages of Opening a TFSA

The biggest advantage is that any interest, capital gains or dividend income earned is tax free! As a result you can grow your money faster than in a typical investment or savings account as income earned in these accounts are subject to taxation when either earned or when money is withdrawn. Another advantage is that you can withdraw from it anytime which gives flexibility. Finally, anyone can set up a TFSA as you do not need to be earning income to have one.

Disadvantages of Opening a TFSA

One of the biggest disadvantages is that if you use it as a savings account, the interest rates are not very high. For example, if I want to put money in a savings account within a tax free savings account, the interest I would receive would be about 1% per year. If a put it into a high interest savings account, I can earn some where in between 1.5 to 3% which is a bit higher and can earn a higher rate of return even after the interest is taxed. Another disadvantage is that you can only invest a certain amount every year. For example the TFSA limit for 2022 was $6000.00. However, if you have never invested in it since its beginning then you could possibly invest up to $81500.

Should I Open a TFSA?

Yes you should! The only reason you might not open one is that you would be only using it as a savings account where the interest rates would be low. However, if you do not need to use the money in the foreseeable future, you might look at putting the money into a GIC where you might get a little better interest rate and there is no risk. But if you are an investor and you do not mind the risks involved investing in securities or mutual funds, then opening a TFSA is an absolute must as you will grow you money faster. So open a TFSA and use it correctly and you will not be disappointed!

You Might Also Like:

10 Ways to Save Money on Rent – Saving on Apartments and Condos

Search

Our Recent Posts

  • Wendy’s Specials and Deals – Only $1 for Large fries with any other order (App Only)
  • Canada Child Benefit Payment dates 2022 – When will I get my CCB this month?
  • Calgary Costco gas prices – Cheapest gas in Calgary
  • Can I Get EI if I Quit My Job? Canada’s Employment Insurance Questions and Answers
  • Sam’s Club Customer Service – Phone number, online chat, email and more

Trending Posts

  • Pottery Barn Teen – Ships to Canada – Cool Teen bedroom and dorm decor
    May 2, 2022
    By christinam
    Hi all. We not only like to tell you all about deals, but also about retailers online that you may...
  • A picture to denote a person wanting to quit their job and asking the question can I get EI if I quit my job?
    Can I Get EI if I Quit My Job? Canada’s Employment Insurance Questions and Answers
    May 16, 2022
    By colinm
    Can I get EI if I quit my job? This is a very important question and something that a lot...
  • A piggy bank to highlight article about TFSA
    Should I Open a TFSA Today?
    May 5, 2022
    By colinm | 2 Comments
    Should I open a TFSA? It's an interesting question as it seems to be all the rage right now. It...
  • 10 Best Baby Shower Gifts Canada – Baby Baskets and more
    April 25, 2022
    By christinam
    Is there anything more wonderful or more adorable than a new baby? Since here in Bargainblog land we are currently...
  • Shoppers Voice Surveys – Get Free Stuff for filling out surveys in Canada
    April 25, 2022
    By christinam
    Do you love expressing your opinion? We all do! I've been filling out Shoppers Voice surveys for years (well, I'm...

Get Updates On Our Latest Posts

Search

Proudly powered by WordPress