What Exactly is a TFSA (Tax Free Savings Account) ? Should I put money in a TFSA or a RSP?

We have clients that have heard the name but most people don’t know exactly what it is.  A common question around our office is “What is a TFSA?” Usually followed by “I thought I could only invest it in a savings account.”

Here’s where I usually say “Pretend your TFSA is a box that can hold any type of investment and it can stay in that box tax free and you won’t have to pay tax on anything you take out of the box”…see it doesn’t have to be confusing!  And I’m sure my clients are now nodding and saying yes I’ve heard that one before.

Here’s an article to explain more about the TFSA

https://www.fidelity.ca/fidca/en/valueofadvice/gvga/tfsa

Then we most likely will hear “Well should I put money in a TFSA or in a RRSP”  Good question and it totally depends on your unique situation.  (Yes, in our office every clients situation is unique because no two people’s finances and goals will ever be the same!  Kind of like a fingerprint.)

Here’s an article that may help you decide which plan may be best for you.

https://www.fidelity.ca/cs/Satellite/doc/tfsa_compare_rrsp.pdf

When in doubt call us, we will be able to help!

Jodi