Transcript: What is a TFSA?

[Music playing]

[A top-down view of a table surface. Papers and a folder slide into frame. The folder is labeled with the letters TFSA. The table and papers drop out of frame as the folder moves into a central position.]

A Tax-Free Savings Account, or TFSA, is a registered savings plan to help you save for different purposes throughout your lifetime, and allows you to earn tax-free investment income.

[The folder falls open, and green dollar bills start falling into it.]

This means that contributions to the plan are not tax-deductible, and withdrawals of contributions and earnings from the plan are not taxable.

[A yellow sticky note that reads, “Not tax-deductible!” lands on the stack of money in the folder.]

[A part of the stack of dollar bills moves out of the folder with a yellow sticky note on that reads, “Not taxable!” The second pile moves out of frame as the shot pans in on the now-closed folder. A small and bound stack of money falls into the folder.]

You can hold a variety of investments inside a TFSA plan, including savings accounts, mutual funds, stocks, Guaranteed Investment Certificates (GICs), and bonds.

[Various documents representing account statements, mutual funds, stocks, GIC certificates and bonds are also added into the folder.]

Some of the things you should consider before opening a TFSA are… 

[The folder slides out of the frame and is replaced by a dollar bill with the yellow sticky note on it that reads, “Not tax-deductible.”]

TFSA allows you to set money aside in eligible investments and watch those savings grow tax-free throughout your lifetime.

[Dollar bills start piling in the centre of frame, which is tagged with another yellow stick note that reads, “Tax-free.”]

Interest, dividends, and capital gains earned in a TFSA are tax-free for life.

[The bills slide out of frame. A grid pattern appears and turns into a line graph where the lines represent capital losses within TFSA and capital gains outside TFSA.]

There is an annual TFSA contribution limit for each individual, 18 years of age or older. Unused contribution room from one year is carried forward and added to the TFSA contribution limit the following year. Any withdrawals made in a calendar year will create additional contribution room in the following year.

[Two desk calendars, one for the current year and the other for the following year, appear next to each other. A red arrow begins repeatedly moving from the former into the latter, representing the contributions being carried over.]

Your TFSA savings can be withdrawn from your account at any time. However, specific product restrictions, like GIC maturity dates, may apply.

[The dollar bill with the sticky note that reads, “Tax-free,” pops back into the frame, which is then replaced by a clock The hands of the clock begin moving denoting the passage of time as 4 dollar bills pop out from behind the clock.]

[The clock slides out the form as the bills form a pile again with a sticky note on it that reads, “Not income.”]

Any amounts withdrawn will not be considered income for tax purposes or used to determine your eligibility for federal benefits or credits, such as Canada Child Tax Benefit or Old Age Security.

[Two sample documents appear: one of them reads, “Canada Child Benefit,” and the one next to it reads, “Old Age Security.” The shot pans in on each as the narrator refers to them.]

If you’re a Canadian resident, and you've reached the age of majority in your province or territory, you’re eligible to open a TFSA.

[A map of Canada appears. The borders of each province are defined, within which the age of majority is noted. It is 18 in Alberta, Manitoba, Ontario, Prince Edward Island, Quebec, and Saskatchewan; and 19 in British Columbia, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, and Yukon.]

Chat with us to see if a TFSA is right for you.

[A desktop computer appears. The mouse cursor moves to the search box, and www.cibc.com is typed out in the field. The mouse cursor then moves over to the search icon and taps it.]

Setting up a TFSA is easy! You can open a TFSA by simply applying online on CIBC.com, or speaking with a CIBC advisor at any CIBC Banking Centre.

[The camera then pans to the right to reveal a small CIBC Banking Centre with trees on either side of it. ]

[CIBC logo.]