It's a great way to save for a new car, home renovations, a dream vacation or as an emergency back up fund.

Take a Smart Step and keep what you earn; the Taxman doesn’t get a penny!

The Tax Free Savings Account is a brand new savings opportunity that allows you to invest $5000 annually without having to pay tax on any investment income or capital gains earned. All Canadian residents, age 18 or older, who have filed an income tax return and have a Social Insurance Number can open a Tax Free Savings Account.

Unlike an RRSP, which was originally designed to provide you with income after you retire, the Tax Free Savings Account is designed to help you save for a wide range of goals during every age and stage of your life; especially on purchases like a new car, home renovations, a dream vacation or just to have as an emergency back-up fund.

Although titled an account, it’s really a plan where you can hold a number of different investment products, like a savings account, GICs, mutual funds, stocks or bonds.

How Can The New Tax Free Savings Account Benefit You?

• If you maximize your RRSP contribution annually, the Tax Free Savings Account will allow you to further tax shelter investment income.
• If you’re age 71 or older, you’re required to draw down on your Registered Retirement Income Fund (RRIF). If you have ongoing savings needs, you can now invest up to $5000 of your RRIF income annually in a Tax Free Savings Account. The investment income earned in the Tax Free Savings Account will not affect your Guaranteed Income Supplement. Currently, income earned on non-registered investments is used to calculate eligibility for federal income-tested benefits and credits. The income earned, or the funds withdrawn from your Tax Free Savings Account will not affect your eligibility for federal income-tested benefits and credits, such as Old Age Security Benefits, Canada Child Tax Benefit, or Employment Insurance. Example: Bill and Patricia, a modest-income couple, expect to receive the Guaranteed Income Supplement (GIS) in addition to Old Age Security and Canada Pension Plan benefits when they retire. They earn $2,000 a year in interest income from their TFSA savings. Neither this income, nor any TFSA withdrawals, will affect the GIS benefits. If this $2,000 were earned on an unregistered basis, it would reduce their GIS benefits by $1,000.
• If you currently keep your money in a high-interest savings account, you might earn 3 per cent a year. Ontario has a top tax bracket of about 46% per cent, so a high income earner would give the government almost half of their 3 per cent investment income if the money was held outside a Tax Free Savings Account. With a Tax Free Savings Account you keep all of your investment income!
• Withdrawals can be made from a Tax Free Savings Account at any time and for any reason. The amount withdrawn will automatically be added to your contribution limit for the following year. Any unused contribution room can be carried forward indefinitely.
• In both a married or common-law relationship, each person can hold a Tax Free Savings Account. In the event of a death, the Tax Free Savings Account can be transferred tax free to the surviving spouse or partner.
• Unlike an RRSP, the Tax Free Savings Account can be used as security to obtain a preferred rate of interest on a Loan or Line of Credit.
• Comtech’s Tax Free Savings Accounts are insured up to $100,000 per plan by DICO. i.e. if you had five plans at $100,000 per plan you would be insured for $500,000.
• Because capital gains and other investment income earned in a TFSA will not be taxed, a person contributing $200 a month to a TFSA for 20 years will enjoy additional savings of $11,045 compared to saving in an unregistered account.

  

• Investing in a Comtech Tax Free Savings Account allows you to earn a highly competitive rate on our one to five year GICs or in our high interest savings account. Rates of return on mutual funds, stocks or bonds are not guaranteed; their value changes frequently and past performance may not be repeated. Mutual Funds and Securities are offered through Qtrade Advisor, a division of Qtrade Securities Inc, member IIROC and CIPF. Mutual Funds are also offered through Qtrade Asset Management Inc, member MFDA.