TFSA

Kick start your savings and enjoy tax-free income with TMECU’s Tax Free Savings Account.

Account features:

  • Contribution can go up to $5,500 a year
  • Income earned is completely tax-free
  • Large selection from a range of investments

Our TFSA solutions

 

Term Deposits (GICs) Earn a set interest rate over a specific time frame.
Index Linked Term Deposits The principal is guaranteed with participation in upside movement in the S&P/TSX 60 index.
Mutual Funds* We have a variety of funds to meet your needs.
TFSA Saving Account Build your funds in this account while you decide on other investment products. 

 

See below for Frequently Asked Questions

 

or

 

Contact your branch for more information.

 

* Mutual funds are offered through Credential Asset Management Inc. 

Who can open a TFSA?

To open a TFSA. You must be qualified for the following:

  • An individual investor (not a trust or corporation)
  • A resident of Canada
  • A valid SIN number
  • 18 years or older

What is the annual contribution limit?

There is an annual contribution limit of $5,500.  If you withdraw funds from the account, this amount will be open for reinvestment in the future.  It is the responsibility of the investor (member) to ensure they do not exceed this limit. 

Here is an example of how contributions and withdrawals will work:

 

 

Contribution limit  $5,500
Contribution by member  $3,000
Withdrawn by member $1,000
Contribution room carried over  $3,500 ($5,500 minus contribution plus withdrawal) 

Contact your branch to let us figure it out for you: click here

How do I enroll in a TMECU TFSA account?

There are two ways to enroll in your TMECU TFSA account:

1)      Call your branch

2)      Visit your branch

 

To find branch information click here

What is the difference between an RRSP and TFSA?

There are two main differences between an RRSP and the TFSA:

  1. Your contributions to an RRSP are tax deductible and reduce income for tax purposes. TFSA savings will not be deductible.
  2. When you withdraw from an RRSP, it is added to your income and taxed at the rates that currently apply. Funds withdrawn from a TFSA will not be taxed.

 

Here is a snapshot of some of the main differences:

 

 

   TFSA  RRSP
 Tax sheltered investment earnings  Yes  Yes
 Tax deductible contributions  No  Yes
 Withdrawals are taxable  No  Yes
 Contributions not used carried forward  Yes  Yes
 Withdrawals can be contributed again  Yes  No
 Maximum age limit  No  Yes
 Contribution limit based on earned income  No  Yes

 

An added benefit for retirees is that there is no age limit for making contributions (in contrast to the RRSP max of 71).  In effect, the TFSA can shelter RRIF withdrawals that are not needed.

 

What are the investment options with a TFSA?

The eligible investments are the same as those for RRSPs including term deposits and GICs, index-linked term deposits, mutual funds and variable interest savings accounts.

What happens if I don’t contribute the maximum in a given year?

The TFSA has a carry forward provision which allows taxpayers to contribute up to their maximum at any time.  The contribution limit will be indexed to inflation, but is not included in the calculation for simplification.  The unused contribution room will be included on your Notice of Assessment.

When can I withdraw from the TFSA?

The TFSA is fully liquid, meaning you can add to and withdraw from the account at any time.  This flexibility allows you more freedom in your financial decisions.  The account is not subject to withholding tax, and nothing withdrawn from the account is reported for income tax purposes.

How does the TFSA work with my taxes?

The investments included in the TFSA are not tax deductible.  You invest the after tax money into the account.  At that point, and investment earnings are not taxable, not even upon withdrawal. 

What happens if I over contribute in any given year?

A penalty of 1% per month on the excess contribution will be assessed by the Canada Revenue Agency.

 

How about contributions to a spouse or common-law partner?

The TFSA is solely an individual account.  However, funds can be given to the spouse or partner for investment in their account.  The income earned on money given to a spouse or partner will not be attributed back to the spouse giving the funds. 

What happens if my common-law partnership or marriage ends?

Any amount is transferrable to the former spouse.  The recipient’s contribution limit will not decrease, and the contributor’s limit will not increase. 

What will happen if the TFSA passes away?

All of the funds are transferrable to the remaining spouse without affecting their contribution room.

 

Can the TFSA be used as security for a loan at TMECU?

Yes, TMECU can use the TFSA account as security for a loan.

 

What other resources are there?

Canada Revenue Agency Individuals website

http://www.cra-arc.gc.ca/tx/ndvdls/menu-eng.html

 

Find Branch/ATM

Enter address, postal code or branch name