BMO's Financial Tip of the Week: Take Advantage of Increased Annual Contribution Limit to Maximize Your TFSA Contribution
TORONTO, ONTARIO--(Marketwire - Dec. 13, 2012) - As part of BMO Financial Group's ongoing commitment to financial literacy and 'Making Money Make Sense' for Canadians, BMO is releasing a financial tip every week in 2012.
BMO's Financial Tip of the Week: Take note of the changes to the annual contribution limit and maximize your TFSA contribution.
Beginning in 2013, Canadians will be able to contribute up to $5,500 a year to their Tax-Free Savings Account (TFSA), an increase of $500.
TFSAs are a fantastic savings vehicle that provides Canadian investors tax-free growth on their savings and investments. The increase in annual contribution will allow Canadians further opportunity to save on taxes and help households to achieve their financial goals faster.
"When saving for the short or long term, it's important that Canadians take advantage of tax-friendly options wherever possible," said David Heatherly, Vice President, BMO Bank of Montreal. "TFSAs are powerful investment tools that allow Canadians to enjoy the benefits of tax-free growth."
- Canadians aged 18 and older can contribute up to $5,500 per year into a TFSA, effective 2013. Any unused contribution room from the previous year can be added to the contribution room for the following year. In addition, any withdrawals can be re-contributed the following year without affecting the annual contribution limits.
- You can hold the same investments in a TFSA as you could in a Registered Retirement Savings Plan (RRSP), including GICs, bonds, cash, mutual funds and stocks.
- Contributions to TFSAs are not deductible for tax purposes, and withdrawals of contributions and earnings are not taxable.
Try the BMO TFSA Calculator to learn how a TFSA can help grow your savings faster.
For more information on TFSAs, please visit bmo.com/tfsa.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $525 billion as at October 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.
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