When it comes to Tax-Free Savings Accounts (commonly known as TFSAs), we’ve got good news…and not-so-good news. First the good – nearly half of all Canadians now have a TFSA (it’s about time!). Unfortunately, only 21 percent of them have an investment-style account, and most are only using their TFSAs to store extra funds, according to a recent CIBC poll.
While we’re all for saving in any form, there’s one big problem with failing to invest your TFSA: you’re missing out on its benefits. That’s because unlike an RRSP, a TFSA is funded with after-tax dollars. Its claim to fame is that any growth and gains on your investment – such as capital gains, interest and dividends – are protected from all tax. As such, if you don’t rack up some interest and returns, you’re missing out on the TFSA’s tax-free advantages.
Now, we’d venture to guess that many of you aren’t investing because you’re confused about the investment options for a TFSA. Well, throw that excuse away! Get the rundown of all the choices you have at your disposal to truly put your money to work in my new article on GoldenGirlFinance.ca: http://bit.ly/NkA7a0