TFSA question

**PrairieGirl** · 02-18-2009, 12:44 PM

I was just thinking:

Would it be better to use my TFSA as my EF savings account until I hit the yearly $5000 mark, and then anything over that, put into a regular SA? Wouldnt this save me $$$ on my 2008 tax return for the interest earned on the larger amount in the TFSA?

**monkeywrangler71** · 02-18-2009, 01:12 PM

I think everyone should be putting their first $5000 of savings into a TFSA. There's no point paying tax on that interest when you don't need to.

**PrairieGirl** · 02-18-2009, 01:19 PM

Originally Posted by monkeywrangler71

I think everyone should be putting their first $5000 of savings into a TFSA. There's no point paying tax on that interest when you don't need to.

Thats what I was thinking as well...just wasnt sure if it made sense or if it was just in my head

Wait...what if I need to use that money sometime down the road? Would it still be a good idea to put it into a TFSA?

**Robert C** · 02-19-2009, 09:33 PM

I am in the financial industry. I would recommend that everyone give serious consideration to setting up a TFSA. This is probably the best idea the government has had yet to help people save for the future.
Yes, put your first $5000 per year of savings into the TFSA. If you need the money later you can take it out, no taxes and only the fees the financial company you invested it with is charging. Make sure you know what kind of contract you have. If you do front end fees for mutual funds, for instance, you will pay up front but not when you take it out. Back end fees are charged when you take it out. If you plan to keep it in long term you want to ask an advisor about DSC plans. Actually if you think you may want to use it soon you may need to ask about something called "low load." Yeah, it can get a little complicated so make sure you talk to a qualified professional before you make a committement.