Save money with a TFSA – Tax-Free Savings Account
If you are a Canadian resident willing to make some tax free investments then Tax Free Savings Account(TFSA) is just for you. It’s a Canadian government initiative started in 2009. The main idea is to give some tax benefits to investors having reached a certain age to encourage investments in the Canadian economy. This special initiative helps an investor to save on taxes on any profit made such as capital gains, dividends, etc. The more attractive offer is that you can withdraw your investments anytime without additional fees or taxes. Some similar type of accounts like the Registered Retirement Savings Plan (RRSP) will make you pay income taxes but TFSA is totally free from any kinds of income taxes. That means you can keep your money away from any observations and earn more interest.
It’s ok if you don’t want to invest cash money in your TFSA account. You have so many other options. You can choose from your publicly traded shares, mutual funds, certain stocks, bonds, guaranteed investment certificates, shares on private corporations, installment receipts, etc. to invest instead of cash.
To become eligible for a Tax-Free Savings Account, you have to be a Canadian resident. Secondly, you must be 18 years or older to invest in a TFSA. There is also a limit on the money you can invest in total for one account. You can invest a maximum of $5500 in a whole year. TFSA will give you one other option that is unique. You will have the carry-over facility associated with every TFSA account that you have, which means that you can use the unused space of the $5500 limit in successive years without additional upward limits. One important point to make is that you cannot increase your quota by withdrawing some money from your TFSA account. The money you withdraw will be considered to be a user space no longer eligible for investment for the current year. You can use this space in the next year though.
Several banks and financial organizations in Canada offer TFSA accounts. They provide competitive interest rates and sometimes an option for unlimited profits upon the investment on certain fields. TFSA is a registered plan. You can make life time profits from a TFSA. You need to have a Social Insurance Number (SIN) with you while you apply for a TFSA. The withdrawal limits and other issues are monitored directly by the government to ensure security. You can declare to transfer your TFSA assets to any of your common-law partner or your spouse upon death.
You might wonder what if you would try to get some other government credits while still using a TFSA. The good news is that you don’t need to worry about a thing. You are eligible for goods and services tax benefits or old age security benefits even though you have a TFSA because TFSA has no effects on federal credits. This makes TFSA a wonderful option for small investments.
There are many reasons to consider mortgage refinancing to replacement your existing mortgage loan with another lender under different terms.
A borrower in Canada may consider refinancing his or her loan for diverse reasons. If you’re not sure whether you should go for a mortgage refinance or not, consider using the services of best mortgage brokers.
The following are some of the different reasons you should consider refinancing.
- Build equity faster
If you are in a position to increase your monthly payments — because of an increase in salary or a fortune — you may want to switch from a 20-year mortgage to a 15-year mortgage.
This switch allows you to build equity on the house quickly. If you consider a bi-weekly refinance option, you’ll quickly build up equity on the house without putting out a large amount of money each month.
- Change the loan type
With lower mortgage rates, you can get a fixed mortgage rate for more peace of mind. If you wish to move from a variable mortgage rate to a fixed rate mortgage rate (due to its added stability), you should consider refinancing. If your variable rate is adjusting, you should consider refinancing and getting a fixed rate mortgage.
- Use the equity you have built up in your home
If you have built up equity in your home (the difference between the amount owed and the home’s worth), you can use cash-out refinance loan to tap into the equity.
You can use this option to make larger purchases, pay off credit card debts or send a child to college. This refinance option is a perfect way to become debt free.
- Pay off the mortgage sooner
If have landed a bonus at work or inherited money and you wish to pay off your mortgage sooner, you should consider mortgage refinancing offered by Canadian mortgage brokers. With refinancing, you can choose to refinance down from a 30-year loan to a 20-year loan.
When you pay off your mortgage loan earlier, you save a significant amount from interests over the life of the loan.
5. You find better mortgage rates
When you first obtained your mortgage, you may have had higher rates than the best mortgage rates being offered today. By lowering your mortgage rate from a higher rate, you can save thousands over the life of your mortgage.