Canadian citizens who are 18 years of age or older are permitted to deposit a total of $6,500 annually into tax-free savings accounts. This TFSA is a registered investment account that is used to hold investments and assist Canadians in saving money.
You contribute to qualified investments when you open a TFSA with the help of a financial institution. The money you withdraw from your TFSA is not subject to taxation.
The tax-free savings account can also be used to invest in mutual funds, segregated funds, insurance GICs, and exchange-traded funds.
TFSAs might be helpful if you want to save but need quick access to cash, have specific financial objectives in mind, or have started working.
A resident of Canada must be 18 years of age or older in order to open a tax-free savings account. A legitimate Social Security number is required. As soon as you turn 18 years old, non-residents of Canada can open a TFSA with a Social Insurance Number.
As a non-resident, the TFSA account contributions you make are taxed at 1% per month. For non-residents, additional taxes are also due.
Investors get unlimited access to their tax-free savings account. But you must confirm that there are no withdrawal limitations on your account’s investments.