Opening a TFSA Account
Canadians, Click Here to Open a TFSA Account at Canada's Largest Independent Online Broker
*Receive $50 in Free Trades
Back in the fall of 2008, the Canadian government announced that its citizens would be able to invest in something called a TFSA.
The TFSA, which stands for Tax-Free Savings Account, allows Canadians to accrue investment gains without having to pay any tax. In addition, since TFSA contributions are not tax-deductible (unlike a RRSP), you don't have to pay taxes or penalties if you decide to withdraw some or all of your money from your account.
That's right - the beauty of the TFSA is that you don't pay taxes on your investment income, interest, dividends and capital gains. That's pretty powerful.
Canadians are allowed to contribute up to $5,000 per year to their TFSA accounts. Stocks, GICS, mutual funds and bonds can all be bought through your TFSA account, in addition to other investment instruments.
So, you probably knew all of that already. The question that you likely have is - where should I open up my TFSA account?
Well, your bank would certainly love your business. After all, banks love getting their hands on as much of your money as possible.
Banks tends to be a bit more hands-on - if you open up a TFSA at your bank, then they will probably suggest sitting down with one of their investment advisors. There is absolutely nothing wrong with that.
However, if you are a bit more of the self-directed type who likes to handle your own investments, then you might want to consider opening up an account at an online brokerage.
A brokerage that I have dealt with for years (more than a decade actually) is Questrade.
Questrade is the largest independent online brokerage in Canada. They are not a massive American company that just happens to have an office in Canada - instead, Questrade is a Canadian company that is headquartered in Toronto.
The benefits of opening up your TFSA at Questrade? Here are a few:
-no fees (no annual fees, no opening fees, no inactivity fees)
-just $1,000 to open an account
-low commissions (Questrade offers $4.95 trades, compare that to your bank)
Questrade also offers a lightning fast sign-up process and a multitude of different funding options. On top of all of that, their customer service is really strong.
There is absolutely nothing wrong with opening up your TFSA account at your bank.
However, I think you will find that Questrade is quite a bit cheaper than your bank. In addition, Questrade is a smart choice for people who prefer to be more involved in the selection of their own investments.
If you sign up for Questrade using the link below, you will receive $50 in commission rebates.
Click Here to Open a TFSA Account at Questrade
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