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Financial Literacy Month-BMO's Tip of the Day: Invest in a Tax Free Savings Account to Save Thousands of Dollars


TORONTO, ONTARIO--(Marketwire - Nov. 1, 2012) - To mark Financial Literacy Month, BMO Financial Group is releasing a series of financial tips throughout November. As part of BMO's commitment to 'Making Money Make Sense', the tips are designed to help individuals and families save and manage their day-to-day finances more effectively.

BMO's Tip of the Day: Investing in a Tax Free Savings Account (TFSA) can save thousands of dollars in taxes over the long term.

A TFSA offers the flexibility of tax-free withdrawals and no restrictions on how the funds are used.

Here is an example of the benefits of tax-free growth in a TFSA:

Invested in a TFSA Invested outside a TFSA (Taxable account)
Maximum Annual Contribution $ 5,000 $ 5,000
Rate of Return 5 % 5 %
Term of Investment 20 years 20 years
Total Investment $ 173,596 $ 143,903
Total Tax Savings $ 29,693 $ 0
*5 per cent rate of return for illustrative purposes only

"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 benefit of tax-free growth, which can help them reach their investment goals faster."

Try the BMO TFSA Calculator to learn how TFSAs can help grow your savings faster.

For more information on TFSAs, please visit bmo.com/tfsa.

For more on financial literacy, Canadians can visit the Government of Canada's Financial Literacy Month website, as well as BMO's Financial Literacy online resource.

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 $542 billion as at July 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.

Media Contacts:
Jessica Park, Toronto
(416) 867-3996
jessica1.park@bmo.com

Valerie Doucet, Montreal
(514) 877-8224
valerie.doucet@bmo.com

Laurie Grant, Vancouver
(604) 665-7596
laurie.grant@bmo.com

Internet: www.bmo.com
Twitter: @BMOmedia