There is a subtle, yet important distinction between a ‘savings account’ and an ‘investment vehicle’. The Tax Free Savings Account (TFSA) has confused many individuals because of the term ‘savings account’. Canadians naturally assume that they should go to their financial institution and open up a ‘savings account’ and register a TFSA.
Don’t just ‘save’ your money, ‘invest’ it!
The Tax Free Savings Account is a vehicle to hold investments paid with after-tax dollars where the principle and growth can be withdrawn in the future tax-free! In my opinion, this is the most powerful registered account available to Canadians with the only limitation being the contribution room of only $63,500 (as of 2019).
TFSA’s should be an integral part of your investment portfolio and retirement planning.
