What types of tax-free savings accounts (TFSAs) exist? + MORE Nov 20th

Canadians have lots of options when it comes to filing our income tax returns. We can hire an accountant or the services of a tax return preparation company. We can also take it upon ourselves to input our details into a tax software. And, yes, you can even do it all on pen and paper and mail the T1 General form to the Canada Revenue Agency (CRA). But let’s look at the online options available for Canadians, including the popular H&R Block, Wealthsimple Tax, Intuit TurboTax, UFile and GenuTax.

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How to use H&R Block online tax software

Founded in 1955 and with more than 1,000 brick-and-mortar storefronts across the nation, H&R Block is a big name in the tax preparation business in Canada. It offers both full service and DIY filing options, in-person or online. For those wanting to do it themselves, H&R Block offers a variety of packages suitable for all sorts of filings, including those for individuals with income from rental properties, foreign countries, and self-employment or side-gigs…

A tax-free savings account (TFSA) is a fantastic way to earn money on your savings, without having to pay tax on those earnings. Registered by the federal government, TFSAs are available to Canadians aged 18 and older. Unlike a registered retirement savings plan (RRSP), you cannot deduct contributions to your TFSA from your income tax, so you will have to pay income tax on that initial money. But as long as you adhere to TFSA guidelines, you won’t pay taxes on any earnings made within the TFSA, not even when you withdraw it. Plus, you can withdraw as much as you want at any time.

There’s a specified limit to how much money you can put inside a TFSA. For 2023, the annual TFSA contribution limit is $6,500, and for 2024, it will be $7,000. As of Jan. 1, 2024, there is a lifetime maximum of $95,000 for those who were 18 or older as of 2009. The good part is that any unused contribution space and any amount that you withdraw from your TFSA becomes available to you as contribution room in the next calendar year…

Ask MoneySense
I am not sure what to do. I have a promo rate of 5.25%, and I will soon open a Tangerine account to have their 6% promo.

I know a lot of people are saying that the best way is to invest that money in the stock market. But having that kind of return with absolutely zero risks and having interest paid monthly seems like such a good deal compared to ETFs or other investments. I am not sure what to do.

I do have some investments, but it’s less than 10% of all my money.

What do you think, am being I too conservative?

—Grace (name changed)

Are interest rates better than stocks?

It may be appropriate to leave $100,000 in a high-interest savings account (HISA). It’s your money, your life and your future. You are the one that must live with your decisions. Ultimately, savings and investment decisions come down to a combination of emotions, knowledge, products and ambitions.

Savings versus savings bonds: which is better?

To help you decide, let’s take a historical look at the returns of investments and 30-day Canadian Treasury bills, after inflation…