What is one of the best Tax Sheltered Accounts in Canada?
At the beginning of my career, I have always had one big question in my mind which was: If there are any saving accounts that are available for us Canadians to take advantage of, where should I invest my money? Where will my investment grows and how can I earn on a tax-free basis (so that I do not have to pay on the money on which was tax already by like CCP, EI, etc). The #1 account that I always recommend to my clients for their investment and growth is the TFSA account. Although many have heard about this account, they think that it is a normal savings account that can either give them a 0.5% or 0.05% interest, which is not the correct information about this account. In order to use this account effectively, we have to look at the inside of it or the meat as I call it. If its either a GIC, Term-deposit, Mutual Fund, or Segregated Fund. This way we can actually put the money to work for you and grow your investments over the long term. This is for people who know that over the long term, the money will grow and the time for the money will compound over the years which gets more exponential over time. The current limit per year that the government has set out for us is 6k per year now, and if you have not touched this account when you were 18 in 2009 the total should be around 69k (Always double-check in the CRA account for the correct limit or with your accountant). This is one of the best "Tax Advantaged" accounts to really grow your wealth in Canada.
Another few questions to take home:
- Am I fully maximizing the use of this account?
- Am I actually starting to save even a bit for my family retirement or even mine?
- What interest rate am I actually getting in my account? And is it actually growing?
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