Tax Free Savings Account -Go open one!!

[Reef_Geek]

Originally Posted by foxfishfan

If anyone is investing in a TFSA, don't do it as the interest rate is quite low. You can also buy a tax free gic which pays 1.6% for a 15 month term, for instance. Yes, the money is locked in for 15 months but the interest is 3x that earned leaving it in the account and is all tax-free.

TFSA is simply the status registered with the government. What you're describing is applying the TFSA status to GIC.

For example, my TFSA is a mutual funds account. I can choose to buy any mutual funds (offered by the financial institution where account is held) in this account so long as I do not exceed my contribution room. Additionally, you can have multiple TFSAs... for example, everyone has a cumulative contribution room of $25.5K ($5K/yr since 2009 and $5.5K for 2013), so you could have, say, $5K in a TFSA GIC, $5K in a TFSA mutual funds account with bank X, $5K in a TFSA mutual funds account with bank Y, $5K in a TFSA cash savings account, $5.5K in a stock trading account with another brokerage. You can withdraw at anytime and you will get your contribution room back (following year).