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Tax Free Savings Account |
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What is a Tax Free Savings Account?A Tax Free Savings Account is a government approved savings plan that allows contributions based on pre established limits by the Department of Finance. The limits are established every year from a base of $5000 established in 2009. Who can contribute?Individuals who are a resident of Canada who are 18 years old with a valid Social Insurance Number can invest in a TFSA. There is no maximum age restriction. Contribution LimitStarting in 2009, the individual contribution limit is $5000. This amount will be indexed annually to inflation to the nearest $500. Unused Contribution RoomIndividuals will accumulate $5000 TFSA contribution room each year (adjusted to inflation). Withdrawals will increase contribution room and unused contribution room can be used for future years. Your contribution room will be reported on your notice of assessment. WithdrawalsIndividual has access to funds at any time subject to the type of investment being held. The withdrawal is not subject to withholding tax nor is the income subject to tax. Withdrawals will not impact eligibility for income tested benefits or credits. InvestmentsIndividuals can choose from a wide array of investments available at the Vermilion Credit Union.
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