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Email this11:12 pm
December 11, 2024
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Hi, this is my first post,
I am unsure what happens in the following scenario. Any help would be of great interest to me.
Let's suppose:
-my CR is 5,000
-on DEC 15 2024 i invest 1,000 as a 1 year term
-CR increases by 5,000 in JAN 2025
-it is now DEC 14 2025
-in one day, my 1,000 will become 1020 (20 interest)
on dec 15 2025, i want to:
1, re-invest that 1020 WITHOUT losing more CR than i now have lost, but
2, while adding 80 to that 1020, accepting that my CR will decrease by 80 more
All in all, I want my investment to become 2000,
and my CR to become 8,000 (5k+5k-2k). can that be done?
I am asking that because i notice that changing the amount (as i propose doing, above) might disqualify the re-investment from being a "transfer" type of re-investment. (I understand a "transfer" to be a mode of re-investment which does NOT cause you to lose more CR, unlike had you withdrew the 1020, added 80, and then re-invested it).
thank you for your help,
dollartree
(someone took my handle, but my understanding is that they do not have access to this text box).
4:40 am
April 27, 2017
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Not clear what are getting at. Still, assuming no withdrawals:
1. Contribution room will increase by $7000 in January 2025.
2. Interest within TFSA is irrelevant to your contribution room.
3. Contributing $1K this december will reduce your CR by $1K. So if CR was $5K it becomes $4K.
4. In January 2025 contribution room would increase from $4K to $11K.
12:35 pm
December 11, 2024
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Thank you much, but that does not answer my question. I know all of which you have stated. Perhaps my question was not clear.
Suppose I made my first ever TFSA investment dec 1 2024.
Suppose it was for 1k and on a 1year term.
Suppose my CR was 5k just prior to making that investment.
So my remaining CR became 4k.
Jan 2025 arrives, and my remaining CR becomes 11k (CR went up 7k).
On dec 1 2025:
The investment matures, and the bank moves the interest to my chequing account (I asked them to do so).
As for the $1000, I want to add $1000 to it (making it $2000), and invest that $2000 as ONE single TFSA, for another 1 year term.
Upon doing so, my remaining CR will be 10k.
Not 9k (CRA won't see this 2k as being invested on top of the initial 1k).
Correct?
2:13 pm
September 29, 2017
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First, you are misunderstanding what a TFSA is. It is NOT the same as say a GIC, as in it is not an investment. A TFSA is simply a special type of account. But that is all it is. Period. Think of it as a bank account with special rules.
But to answer your specific question, no; it is almost but not quite correct. The CR is based on the amount going in in the current year + any amount taken out the previous year, plus annual CR increase by the government.
So, the correct answer for your example is that your CR in 2025 after the extra $1000 deposit = 10K + the interest that was taken out and deposited into your chequing account (assuming the original $100 was not taken out, if I read your example correctly).
Rather than repeat the same explanations, and understand how the CR works, follow this thread:
https://www.highinterestsavings.ca/forum/tax-free-savings-accounts/understanding-tfsa/
A summary is here:
https://www.highinterestsavings.ca/forum/tax-free-savings-accounts/understanding-tfsa/#p103602
or read up on the CRA website:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4466/tax-free-savings-account-tfsa-guide-individuals.html
9:03 am
February 22, 2024
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How did you arrive at 5k contribution room? Your post indicates that you opened your first TFSA in 2024 and the only contribution you made is $1,000. Unless you turned 18 in the last couple of years your contribution room would be much higher than 5k.
Contribution room accumulates for every adult resident in Canada even if they do not have a TFSA. So if you were 18 in the year the TFSA came into existence which is 2009, your contribution room in 2024 when opening your first TFSA would be $95,000. If you turned 18 in 2020 your contribution room in 2024 when opening your first TFSA would be $69,500.
Here's a link to a chart showing contribution limits over the years, your contribution room starts in the year you turned 18:
TFSA Contribution Limits
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