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Tax-Free Savings Account (TFSA)

A Tax-Free Savings Account (TFSA) is an account that provides tax benefits for saving in Canada. Any amount you contribute as well as any income earned within the TFSA, is not taxed in most cases, even when you withdraw the funds.

The Zag Tax-Free Savings account offers a great rate with no fees and no conditions attached. Pay no income tax on the interest you earn so you keep more of what you save with a Zag Tax-Free Savings Account.

You can also use our ‘Set and Save’ recurring transfer option to make sure you take advantage of your annual contribution limit. Through Zag Online, you can set up recurring transfers from the external account linked to your Zag Tax-Free Savings account to automatically transfer funds on a set schedule.  You can decide how much, how often and when you want to start.
 

Simply decide:

  • How often you would like transfers to be made;
  • The amount you would like transferred;
  • When you would like your transfers to start.

Everyone has different reasons for saving and investing. The great thing about our Tax-Free Savings Account is that it can help you to achieve almost any savings goal. For example, you can decide to make automated monthly contributions to your TFSA for:

A rainy day fund
Let your money grow tax-free and take comfort in knowing it’s there for you when you need it most.

Reach a goal
Set a goal. Contribute regularly. Watch your dream come true. A TFSA is a great way to save for renovations, vacations, a down payment or the day you open your own business.

Save for retirement
Retirement income can come from many sources including your RRSP and government benefits. You can use your Zag Tax-Free Savings Account as one more source of funds that you can withdraw without tax consequences.

Save during retirement
If you have a Registered Retirement Income Fund (RRIF), you are required to withdraw a minimum amount every year. If you do not need all of your RRIF withdrawal or pension income to cover your living expenses, consider contributing the excess to a tax-free savings account that allows your funds to benefit from tax-free compound growth.

The amount of money that you can contribute to a TFSA is determined by Canada Revenue Agency (CRA) on an annual basis. Since the program began in 2009, your contribution room has been accumulating each year. Unlike an RRSP, you do not need to file a tax return to be eligible for TFSA tax savings. However, you must be 18 years of age or older, have a valid Canadian social insurance number and be a resident of Canada.

As of January 1, 2016, the maximum contribution is $5,500. This chart shows how much you can contribute yearly up to the end of 2018.

Year Maximum contribution
2009-2012 $5,000 each year
2013-2014 $5,500 each year
2015 $10,000
2016-2018 $5,500 each year

For more information, please check with Canada Revenue Agency (CRA) at cra-arc.gc.ca.

Fortunately, this one is easy. It’s always December 31st.  You can contribute from January 1 to December 31 of the current year.

Add the following 3 items together to calculate your unused Tax-Free Savings Account (TFSA) contribution room:

  • Your unused TFSA contribution room from previous years
  • Less any withdrawals from your TFSA made in the previous year
  • Plus, your available contribution room for the current year (max $5,500 in 2018)

Since the program began in 2009, your contribution room has been accumulating each year. This chart shows how much you can contribute up to the end of 2018.
 

2009 $5,000
2010 $5,000
2011 $5,000
2012 $5,000
2013 $5,500
2014 $5,500
2015 $10,000
2016 $5,500
2017 $5,500
2018 $5,500

 

No matter when you open your first Tax-Free Savings Account (TFSA) you are entitled to the same lifetime contribution limit as every other eligible Canadian.

As of 2018, you can contribute up to $57,500 to your account if you were 18 years of age or older in 2009.

From the time you turn 18, your unused contribution room accumulates and carries forward into the next tax year. As of 2018, you can contribute up to $57,500 to your account if you were 18 years of age or older in 2009

Yes. But the rules are slightly different depending on which type of TFSA account you have.

Money in a Zag Tax-Free Savings account can be withdrawn at any time.

Money held in a Zag Tax-Free GIC cannot be withdrawn until the GIC reaches its maturity date.

When you make withdrawals from your TFSA account during the year, the withdrawal amount will be added to your TFSA contribution room at the beginning of the following year. You can replace the amount of the withdrawal in the same year only if you have available TFSA contribution room. 

For more information, please check with Canada Revenue Agency (CRA) at cra-arc.gc.ca.
 

 

Yes. But the rules are slightly different depending on which type of TFSA account you have.

Money in a Zag Tax-free Savings Account can be withdrawn at any time.

Money held in a Zag Tax-Free GIC cannot be withdrawn until the GIC reaches its maturity date.

When you make withdrawals from your TFSA account during the year, it is important to remember that you cannot re-contribute that money until at least the following year.

For more information, please check with Canada Revenue Agency (CRA) at cra-arc.gc.ca.

No. Just as the name suggests, you will not be taxed on any of the withdrawals you make from your Zag Tax-Free Savings account or from your Zag Tax-Free GIC (upon maturity). If you do make a withdrawal, your contribution room will increase the following year.

For more information, please check with the Canada Revenue Agency (CRA) at cra-arc.gc.ca.

TFSA contributions are not tax-deductible. However, the money you earn is not considered income and therefore not taxed, assuming you have not exceeded contribution limits.

For more information, please check with the Canada Revenue Agency (CRA) at cra-arc.gc.ca.

Your Tax-Free Savings Account (TFSA) is just like a normal savings account except you don’t pay tax on the money you make. That’s why it’s such a great way to save. Because your earnings are not considered income there is no impact on income-tied federal or provincial government benefits or credits. 

Yes. The Canada Revenue Agency (CRA) sets your annual and lifetime contribution limits.

When you make withdrawals from your TFSA account during the year, the withdrawal amount will be added to your TFSA contribution room at the beginning of the following year.   You can replace the amount of the withdrawal in the same year only if you have available TFSA contribution room. 

You can also transfer money from TFSA accounts at your other financial institutions to your Zag Tax-Free Savings account.

Our easy-to-complete ‘Transfer Form’ takes only a few minutes and we’ll handle all of the details for you.

For more information, please check with Canada Revenue Agency (CRA) at cra-arc.gc.ca.
 

Possible tax implications may apply.  There are a number of factors that will be considered.  It’s always a good idea to consult your financial planner or a tax professional for advice. 
 

For more information, please check with Canada Revenue Agency (CRA) at cra-arc.gc.ca.

There are no fees associated with your Zag TFSA account. Every dollar that you invest with us goes straight to work, earning great interest.

You will receive a consolidated annual statement for all of your Tax-Free Savings accounts. No monthly statements are issued for a Tax-Free Savings account. You can download your statement by logging in to Zag Online. Click ‘Accounts’ and select ‘Statements’. Choose from the Document Type drop down menu and select your statement. This file can be opened in your browser window, printed, or saved to your computer as a PDF file.

If you’re new to Zag, opening an account with Zag is easy - it’s 100% self-serve through our website. Go to zagbank.ca and click on ‘Open an Account.’ Our secure application process takes about ten minutes using your desktop, laptop, tablet or mobile device. We just need a few things from you:

  • Your name, address and Social Insurance Number (SIN)
  • A valid email address
  • A cheque from a Canadian financial institution with your name on it. Or both names, if you want to open a joint account

Once you become a Zag customer, it’s easy to add new accounts through online banking. Simply log in to Zag Online and select the new account you would like to open.

Note that we do not offer products and services to residents of Québec at this time.

Contributing to your TFSA account is simple. Simply transfer funds  from your external bank account or your Zag internal accounts. 
You also have the option to automatically move funds on a set schedule and not have to worry about transferring the funds every month. This option makes it easier to stick to a personal budget and regularly contribute savings to your portfolio over a long period of time. 
 
 You can decide how much, how often and when you want to start.

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