They lived in their beautiful home for a decade, then two decades and then three. His wife looked longingly out of the window and imagined a beautiful shade tree or two on the front lawn. But now, retirement was nearing. Now was not the time to plant a tree.
There is an old proverb that says: “The best time to plant a tree is twenty years ago. The next best time is now.”
Wealth management is much the same. The best time to start was twenty years ago. But the second-best time is now.
It’s easy to start, manage and flexible to your needs. The best part is the interest you earn within a TFSA is completely tax-free.
One of the most flexible and easy-to-manage tools for growing your financial wealth is a Tax-Free Savings Account (TFSA). While the TSFA does not take the place of a savings account for emergencies and unexpected expenses, a TSFA is a great way to begin your journey of making your money work for you. It’s easy to start, manage and flexible to your needs. The best part is the interest you earn within a TFSA is completely tax-free.
You are eligible to open a TSFA if you are a Canadian citizen and at least 18 years old. Your contribution is limited by the Canadian government with a contribution rate set annually. In 2024, the maximum contribution was $7,000. For the most up-to-date contribution limits, please visit the CRA website. If you do not have a TFSA and, if you turned 18 before 2009, your maximum lifetime contribution right now is $95,000.
Unlike RRSPs and Mutual Funds, TFSAs are extremely flexible.
If you need the funds, you can withdraw them. The withdrawal does not impact your taxable income, as you have already paid tax on the funds. And the interest you earn is tax-free, so it does not impact your income taxes due. Removing the funds does not impact your total eligible contribution. You can replace the money in the future as long as you don't exceed your personal amount. There is no limit to, or penalties for withdrawing funds.
Your TFSA can hold multiple investments, again, tax-free. Think of it as a folder or box to hold different financial products. There are many different ways to invest in your TFSA and depending on how you invest you can receive a higher return of interest than an ordinary savings account and still have access to your funds.
Some people choose to set up more than one TSFA to use them for different purposes. Having more than one TFSA does not increase your annual contribution. You must split the contribution between the accounts, but it may help you organize your finances in a way that makes it easy to reach your goals.
If you are considering putting money into a TFSA in January 2025, take advantage of our Early Bird TFSA Saver high-interest GIC. You can put your 2025 TFSA contribution amount in a short-term GIC earning 6% interest until December 31, 2024*. In January 2025, we will move the contribution to your Northern Birch TFSA plan, and any interest earned into your savings account. Remember, the earlier you invest the more interest you accrue. While the interest for the short-term investment is taxable, it’s a great way to make your money work harder and smarter.
We have the legacy of our parents and grandparents, many of whom planted trees when they had little hope of seeing them grow to maturity. They planted trees for future generations, believing that they would grow strong and tall.
Saving does not need to be arduous. Start small. One member started their TFSA with an investment of $500 and then committed a payment into the account of $5 a week – not even a dollar a day. Over the years, the account grew into a very nice nest egg giving him and his family increased financial security.
We have the legacy of our parents and grandparents, many of whom planted trees when they had little hope of seeing them grow to maturity. They planted trees for future generations, believing that they would grow strong and tall. They also planted the seeds of financial wealth by investing their money wisely – even though they had very little. They planted the roots of Northern Birch, believing in a future that was financially strong.
We encourage you to take advantage of the Early Bird short-term GIC special for TFSA. If you already have a TFSA plan with us, simply call member services and we will set up the investment for you.
If you haven’t yet opened your TFSA plan at Northern Birch, or would like to become a member, call us today – a member service representative can get you started. Our no-fee and low-fee chequing and savings accounts are a great starting point for growing your wealth.
Call 416-465-4659 to set up or contribute to your TFSA or visit one of our branches at your convenience.
*Some conditions apply. Offers and rates subject to change at any time. Member is responsible for knowing their personal TFSA contribution limits. Promotion open from October 1, 2024 to December 31, 2024. All interest rates are calculated per annum. Visit our website for full details on the TFSA promotion or contact us today.
