Let’s start with what they’re not for: parking cash and looking for interest. It seems, because of the misleading name of the TFSA, tax-free savings account, that many people think it is an account best used to save money and accrue interest. While some banks will provide a high(ish) interest rate for cash in a TFSA, the reality is that this is far less than even a conservative investment in an ETF or mutual fund.
TFSAs can hold a variety of investments, and the reason TFSAs are a valuable tool is because they eliminate the capital gains tax on investments. Having money just sit in the account doesn’t really do anything for you (especially when you take into consideration the cost of inflation), but allowing the money to grow via investment, does.
A MoneySense article published on January 19th details this further, and is worth a read. But for anyone in Vancouver, BC, what’s even better is asking financial experts yourself how you can best leverage the TFSA account.
Wednesday, January 25th, we are holding our second Discussing Finance event at the Unbounce event space in downtown Vancouver. The evening will feature four personal finance experts including a financial advisor, a DIY stock trader, an RRSP expert, and a giving expert from Chimp, who will each give a short talk. Afterwards we’ll have plenty of time for Q&A. And of course, wine is included.
Don’t miss out, there are limited tickets available!
Feature image via @mowoblog
