Friday, January 2, 2009

Tax Free Savings Account (TFSA)

When I had heard about the TFSA which is in play now, my little heart skipped a beat. Why? Well I don't do RRSPs. Bad me! But after some research, it didn't seem like the best idea at this point in my life. I am in a low income tax bracket & would get taxed more when I take it out. So I've been saving what little money in a PC Financial savings account & investing via Questrade.

So I just transferred $5000 into a newly created TFSA at PC Financial. They are currently my main banking providers so it made sense for me to go with them. Their competitive interest rate of 3.75% helped aswell.

For me, I want this money to be liquid so it made sense for me to go with a savings account as opposed to GIC or investments. At this point, I have ~$7000 saved in liquid cash. To suddenly put over 70% in something that was locked didn't make sense. Even though I don't foresee myself having to take anything out in 2009, I like to think of it as emergency money IF for some reason something happens. Hey maybe I'll get hitched & have a big wedding soon. Yeah right! but you never know what will happen.

I wondering what everybody else is doing with their TFSA for 2009.


Fabulously Broke said...

The TFSA is awesome. I'm going to set one up with PC I think and put in $5000, and save the interest in the taxes at least, even if I don't invest it in anything

Thanks for favouriting me!

Fabulously Broke in the City
Just a girl trying to find a balance between being a Shopaholic and a Saver...