A Tax-Free Savings Account (TFSA) is a flexible investment account that can help you meet both your short- and long-term goals. You can use your TFSA for a wide variety of purposes such as home renovations, a family vacation, to buy a car or even to supplement your retirement savings.

How does a TFSA work?

• Canadian residents of majority age who have a Social Insurance Number, are eligible to open a TFSA
• Unlike a Registered Retirement Savings Plan (RRSP), individuals over the age of 71 can open and contribute to a TFSA
• There is no income level required to accumulate TFSA contribution room and the unused contribution room can be carried forward indefinitely. Visit the My Account section of the CRA website to learn about your specific contribution limit
• Contributions are not tax-deductible for income tax purposes, but earned investment income (interest, dividends, capital gains) is not taxed
• Although you cannot contribute to your spouse's or common-law spouse's TFSA, money you give to him or her to invest in their own TFSA will not be subject to the CRA's income attribution rules
• Interest on money borrowed to fund the TFSA is not tax-deductible
• Income earned and withdrawals have no impact on federal income-tested benefits or credits (Guaranteed Income Supplement, Child Tax Benefit, Old Age Security, etc.)

Key benefits of an RBC Direct Investing TFSA:

• Create a diversified portfolio with access to a broad selection of investments including stocks, exchange traded funds (ETFs), guaranteed investment certificates (GICs) (from over 30 providers), mutual funds (from over 100 fund companies), options, bonds and more
• No commissions when you buy or sell mutual funds
• Low commissions with trades starting from as low as $6.95 to $9.95 flat
• Hold and settle trades in U.S. and Canadian dollars and save on foreign exchange conversion
• No maintenance fee when you hold combined assets of $15,000 or more across all of your RBC Direct Investing accounts
• No withdrawal fee
• Access to innovative tools and the latest research to help you make confident investment decisions