Top 10 Things to Know about the Tax-Free Savings Account

1. You can open a Tax-Free Savings Account if you are 18 years of age and a Canadian resident.
   
   
   
2. The Tax-Free Savings Account lets you invest while not being taxed on interest or investment earnings.
   
   
   
3. You can open savings accounts, GIC's and mutual funds tax-free.
   
   
   
4. Unlike an RSP, money you put into your Tax-Free Savings Account cannot be deducted from your income on your tax return.
   
   
   
5. You can contribute a maximum of $5,000 each year.
   
   
   
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.
   
   
   
7. Just like an RSP, when you file your tax return each year, the government will determine your remaining available Tax-Free Savings Account contribution limit for the coming year. Any unused contribution room gets carried over to the following year.
   
   
   
8. You can have more than one Tax-Free Savings Account and you can also have Tax-Free Savings Accounts with more than one financial institution. Just keep track of how much you've contributed so you don't exceed your limit.
   
   
   
9. Unlike an RSP, you don't have to pay any tax on money you take out of your Tax-Free Savings Account, and withdrawals don't affect your ability to qualify for Federal benefits – so you're not penalized for saving.