Tfsa

[wimbly11]

We are currently setting money aside for a number of different things. I have a TFSA. If I put everything we're saving into this one account (and track seperatly what money is allocated for what) is there a penalty for withdrawing money? I don't quite understand these different accounts and can't find the info on my banks website!

[web3]

I work at an investment firm and we don't charge clients to withdraw money.
If you are using it just to put money into, it really isn't that beneficial to you. You only save the tax on investment income. So depending on how long you are leaving the money in there, you may be best to park it in a low risk mutual fund that may earn you a small return.
You will earn squat if you leave it in cash as the interest rate on cash balances are pitiful.

[Retiree]

Our bank does not charge us to withdraw money from our TFSAs but it is really meant for longer term saving so we have only used it to save for big ticket items like a car or down payment on a house . The benefit of the TFSA is that whatever is earned on those funds within TFSA are not taxed.

[wimbly11]

Some are long term, some are shorter time. Any suggestions how I should do this? I am clueless when it comes to banking

[web3]

Talk to your bank. You can look up the mutual funds from your bank and choose the appropriate one to suit your risk level. Look for funds that faired well during 2008, an income or growth and income fund. Invest the long term money in one of those and put the short term money in a money market fund, that is slightly better than leaving it iOr talk to their advisors and they can help you choose.

[tjthemanto]

We are currently setting money aside for a number of different things. I have a TFSA. If I put everything we're saving into this one account (and track seperatly what money is allocated for what) is there a penalty for withdrawing money? I don't quite understand these different accounts and can't find the info on my banks website!

Depends which bank you are with and what type of TFSA you have. TFSA is not necessarily just a savings account, it could be GIC, Stocks and Mutual Funds , under TFSA too.

but if its just a regular TFSA savings account, generally NO fees are charged for withdrawing.

but depending on your contribution room or unused TFSA room left, you might have to wait till next year to re contribute the money withdrawen. Otherwise there could be penalties from CRA.

You can't just withdraw then recontribute, then withdraw again and then recontribute within the same year freely the way you do with a regular account. There are certain restrictions with TFSA.

but in general withdrawing is fine, no penalties and fees for it from CRA and almost all the banks. Recontributing is the tricky part, you could have penalties if you don't follow the rules.

[Tommycoupons]

Ya the Cons really screwed up on the name as it should be called TFIA Tax Free Investment Account.
Like other posters said just as a savings account your getting nothing. It's geared towards investing.
If you look on the CRA website you'll see your current lifetime limit for contributing. I think it's around 40k based on the yearly limit is the same for everyone and the unused portion rolls over every year. So you can only contribute that max total so if you had $5000 in there you'd still have $35k left so you could withdrawal 5k and re-contribute it around 8 times.

You'd have to talk the the bank you set your account up with to find about withdrawal fees, but if it's just cash I doubt you have to pay.

[PurpleBunny89]

I have a TFSA and my money just sits there. I haven't gotten into investing it because I'm still a little deer in the head lights every time I try to find out where to start. When I opened my TFSA (December 2014) the interest rate was 1.5% so I was happy just letting it do its own thing. But I realized right now the interest is only 0.8% so I started looking into GIC's which seem like an easy, idiot proof investment option but at the same time those interest rates currently suck too. It only would make real sense to invest in a long term GIC right now if I had a large chunk of money which I do but I may need to use that within the next year for a planned large purchase.

I'm just going to wait until interest goes back up before looking back into GIC's because at this point if I did one I'd only make an additional $20-$60 compared to just letting my money sit for now. Not worth it IMO especially with this large purchase coming up. Rather have the funds accessible.

[greeny]

There is a limit of how much you are allowed to put into a TFSA. Make sure you don't go over as there is a charge if you do. You are allowed to withdraw as much as you want out of the TFSA account but there are rules when depositing money back in during the same year you made the withdrawals.

[PurpleBunny89]

There is a limit of how much you are allowed to put into a TFSA. Make sure you don't go over as there is a charge if you do. You are allowed to withdraw as much as you want out of the TFSA account but there are rules when depositing money back in during the same year you made the withdrawals.

Once you file your taxes it will tell you how much contribution room you have for the year.

[sweet sparrow]

There is a limit of how much you are allowed to put into a TFSA. Make sure you don't go over as there is a charge if you do. You are allowed to withdraw as much as you want out of the TFSA account but there are rules when depositing money back in during the same year you made the withdrawals.

The current contribution room for 2016 if you've never contributed before is $46,500. I think I'd be really impressed if someone had more than that as extra money sitting around. As long as you have contributed less than $46,500.01 to a TFSA by the end of this year, I wouldn't be worried about overcontributing.

You can't re-contribute the amount withdrawn in the same year. For example, if you withdraw $500, you can't put it back in until January 1st of the following calendar year.

Once you file your taxes it will tell you how much contribution room you have for the year.

You can also look at your bank statements or ask your financial institution. If you haven't spread them out in different places, it should just take one phone call to find out, or one call to Revenue Canada, but they're probably a bit busy this time of year.

[super807]

The current contribution room for 2016 if you've never contributed before is $46,500. I think I'd be really impressed if someone had more than that as extra money sitting around.

Some of us have actually contributed our max TFSA amount and have to put the rest elsewhere But it is a very small minority of Canadians that have done so.

Wimbly, the TFSA might not be the right vehicle for all of your savings goals. It might be appropriate for your longer term goals if you are interested in investing in stocks or mutual funds. GICs are also an option, but interest rates are so low on them right now, might not be worth it.

The advantage of a TFSA is that the interest earned on the savings is not taxed. If you are earning very little interest, there is not much to tax, so not much advantage. You might be better off looking into a regular savings account that offers high interest. Many banks offer them, although right now "high interest" is a relative term.

[sweet sparrow]

Some of us have actually contributed our max TFSA amount and have to put the rest elsewhere But it is a very small minority of Canadians that have done so.

@super807 : I didn't mean that it was impossible to have that much, only that the people who do usually have made plans for it before it reached $46,501.

Let me rephrase. I'd be surprised if anyone under the age of 50 and speaks English as a first language has $46,501 stuffed in their mattress, doing absolutely nothing.

See, I had to rephrase again, because I do know of some elderly seniors who are doing exactly that.

[PurpleBunny89]

@super807: I didn't mean that it was impossible to have that much, only that the people who do usually have made plans for it before it reached $46,501.

Let me rephrase. I'd be surprised if anyone under the age of 50 and speaks English as a first language has $46,501 stuffed in their mattress, doing absolutely nothing.

See, I had to rephrase again, because I do know of some elderly seniors who are doing exactly that.

haha love the way you phrased the above.