Tax Free Savings Account - Please change the name!
Updated: Apr 17
I believe we will look back upon this time and thank our lucky stars that theTax Free Savings Account was created.
What a lot of people think however, and incorrectly so, is that it is just a bank account. And it can only earn minimal interest, 1% if you are lucky. This is incorrect. It's an investment vehicle just like many others and you can hold anything you currently hold in your RRSP. There are very few limits. This is why they need to change the name or at least remove the account from the title.
Perhaps Tax-Free Savings Extravaganza? or Tax-Free Savings Gift from the heavens? or Tax-Free Savings that the government can never touch? That last one was a little long. How about Tax-Free Savings Plan?
You can probably tell I'm a big believer in them. They do not have many pitfalls. With a current annual deposit limit of $10,000, and prior to 2015 the ability to dump in over $30k they have suddenly become, in my mind at least, a great alternative to the RRSP (see my last blog post for more details).
The only pitfall I can think of is you have the ability to take money out of it at any time. So for those disciplined enough to save, not a problem, for those that struggle and might build up the credit card debt a little high...danger!
Of course, this is just my opinion!