Tax-Free Savings Account
Definition
- A type savings account used by Canadians for investment purposes. Income from the Tax-Free savings account (TFSA), including capital gains and dividends, is not taxed. Unlike with a Registered Retirement Savings Plan (RRSP), there is no tax deduction for putting money into a TFSA. Effectively, with a TFSA you are taxed when you put money into the account whereas with an RRSP are taxed when you take the money out.
Relevant Locations
Canada
Synonyms
Le compte d'épargne libre d'impôt
Acronyms
TFSA
Related Terms and Acronyms
- Annuity — Definition,
- A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
- A financial instrument that disperses a number of payments over a set period of time.
- Canada Pension Plan (CPP) — Acronym, Canada, Important,
- A public pension plan administrated by the Canadian government.
- Home Buyers' Plan (HBP) — Acronym, Canada, Very Important,
- A way for a homebuyer to use part of his or her RRSP as a down payment on a mortgage.
➥ Government assistance for first-time homebuyers. - Old Age Security (OAS) — Acronym, Important,
- A Canadian pension plan for eligible Canadians over the age of 65.
- Pension — Definition,
- A retirement plan where money is set aside over many years for an individual's retirement.
- Registered Education Savings Plan (RESP) — Acronym, Canada, Very Important,
- An investment vehicle used for a child's post-secondary education.
➥ RESPs are offered by most financial institutions in Canada. - Registered Retirement Savings Plan (RRSP) — Acronym, Canada, Very Important,
- A savings plan introduced by the federal government to encourage Canadians to save money for retirement. The investment and the interest earned on it is sheltered: it will not be taxed as long as it is left in the plan.
➥ Tax deferred investment contribution used to reduce income tax. - Savings Account — Definition,
- A financial account that pays interest with low risk.
- Tax (TX) — Acronym,
- A levy paid by an individual or entity that is collected by a government.
➥ Bank account transaction code.
