Upcoming Tax Free Savings Accounts (TFSA)
With the big hype around the upcoming Tax Free Savings Accounts, I decided to do some research to see which banks and discount brokerages will be offering the product. I imagine that as we get closer to the launch date (Jan 2009), we will see more of them popping up.
As of today though, here are the companies that will be offering a TFSA:
While we can’t help you avoid taxes in 2008, we can pay you more than enough bonus interest to cover those taxes! Effective January 1, 2009, funds deposited in the promotional Tax-Free Investment Savings Account opened between October 4 and December 31 will be transferred to a new Tax-Free Savings Account so you won’t miss a minute of Tax-Free interest.
Open an ING DIRECT promotional tax-free Investment Savings Account today and on December 31st we will double your interest payment. This should be enough to cover any tax you’ll need to pay on interest earned and will help you get a head start for tax-free saving in January.
Royal Bank (savings and investment accounts)
- Choose from a variety of investment options: RBC Funds, RBC GICs and RBC Savings Deposits.
- You don’t lose the contribution room if you make a withdrawal, but you do need to wait until the next year to re-contribute the money.
- Through a TFSA at RBC Direct Investing you will be able to create a diversified portfolio with access to a broad selection of investments including: stocks, bonds, guaranteed investment certificates (GICs), and over 2500 mutual funds.
Scotia Bank (savings and investment accounts)
- Choose from a range of investments like mutual funds, savings accounts, and GICs.
- All the income (interest, dividends and capital gains) earned in your Scotia® TFSA are tax-free for life.
Bank of Montreal (unconfirmed – I assume savings and investment accounts)
- BMO Financial Group will offer the Tax-Free Savings Account in 2009. Check back regularly as additional information will be added as it becomes available.
CIBC(unconfirmed – I assume savings and investment accounts)
- Most RSP eligible investments such as cash deposits, GICs, mutual funds, stocks and bonds
- All income earned in your TFSA, whether interest or other investment income, is tax-free
Toronto Dominion Bank (unconfirmed – I assume savings and investment accounts)
Starting January 2, 2009, there’s a great new way for you to save money. TD Canada Trust will be offering the new Tax–Free Savings Account, which was recently announced by the Canadian government in the 2008 budget. A Tax–Free Savings Account (TFSA) is a flexible investment account that allows you to earn investment income without paying taxes and gives you access to your money whenever you want it.
PC Financial (high interest savings account)
That’s right. Every dollar of interest earned will be tax-free – for faster savings – when you contribute your funds to the tax-free savings account that will soon be available from President’s Choice Financial services.
E-Trade (Investment account) ($9.99 – $19.99/trade)
Starting January 2009, E*TRADE Canada will be offering the new Tax-Free Savings Account, which was recently announced by the Government of Canada in the 2008 Federal Budget.
An E*TRADE Canada Tax-Free Savings Account (TFSA) is a flexible investment account that allows you to invest in eligible investments without paying taxes on the investment income you earn within the TFSA.
- Contribute up to $5,000 each year starting January 2009
- Investment income (interest, dividends, and capital gains) earned in your E*TRADE Canada TFSA is tax-free
- You can withdraw money from your TFSA for any reason, and all withdrawals are tax-free
Questrade (Investment account) ($4.95 – $9.95/trade)
- The 2008 federal budget introduced a flexible new investment vehicle for Canadians, the tax-free savings account (TFSA). Starting in 2009, Questrade clients will be able to contribute up to $5,000 annually into a TFSA, where savings can earn dividends and capital gains tax-free. For savvy investors, this can improve gains significantly.
I’m thinking that most of the big banks will offer a high interest savings account for the TFSA, but they won’t be as competitive as online savings account companies like ING Direct and PC Financial.
The value with the banks is with their discount brokerage branch where you can invest the money to grow the account over the long term. Since the accounts will be small initially, I’m assume that the trading commissions will be fairly high ($30/trade). The Questrade TSFA looks like it may be the best solution as an investment account in the first few years to keep trading costs as low as possible.
Are you guys as excited about the TFSA as I am?