TFSA

From Planipedia

Starting in 2009, Canadian investors who are 18 years of age or older can contribute up to $5,000 a year into a tax free savings account. The TFSA is a registered account, in the sense that contributions and withdrawals will be tracked by Canada Customs and Revenue Agency. The account accumulates annual contribution room which can then be carried forward and used in the future, similar to RRSP contribution room.

Deposits to a TFSA are not tax deductible, but investment earnings and withdrawals are tax-free. Earnings and withdrawals from the TFSA do not affect government income tested benefits and credits like OAS, GIS and the Child Tax Credit.

Many types of investments like GIC’s, bonds and mutual funds are eligible for the TFSA investments. Funds can be given to a spouse or common law partner to invest in a TFSA and they can be transferred to spouse or common law partner on death.