The new limit, announced at the end of November, means more savings options for Canadians.
Since the government’s introduction of the Tax Free Savings Account in 2009, there have been few changes to the program. The inaugural year saw a limit of $5,000 and it stayed that way until 2013 when the additional $500 was added. TFSA limits stayed stagnant save the $10,000 promotional year in 2015.
This new limit means that for those who’ve never contributed to a TFSA before, and who were of age since the program’s inception, could potentially have a contribution total of $63,500 by January 1st.
The ability to withdraw funds as needed is one of the biggest advantages of a TFSA. Withdrawing money from your TFSA doesn’t count as “income” so it doesn’t affect your annual taxes or other benefits and pensions. So yes – you can withdraw from your TFSA at any time but it’s far more beneficial to let interest build by saving long term.
Limits are easy to track for members with only one TFSA account – but if you have more than one, you need to be aware of your limits based on the total amount.
If you don’t currently have a TFSA, you can open one with AcceleRate Financial and contribute a maximum of $57,500 in 2018 and $63,500 in 2019.
If you have never withdrawn money from a TFSA account, you can keep adding until you hit the current TFSA limit. If you’ve withdrawn money from a TFSA in the past, you can earn that room back the following year.
If you have more than one TFSA, be aware of your limits as they are based on the total amount.
How can I take advantage of this increase?
AccleRate Financial offers competitive TFSA investment terms. Interest is paid or compounded annually. Visit our rates page for more information.
A History of the TFSA Limits