Take advantage of registered plans with special tax benefits to save faster for your goals.
A Tax Free Savings Account (TFSA) is a flexible registered plan that helps you save for any goal or purchase – retirement, a car, a dream vacation – completely tax free.
If you’re over 18, live in Canada and have a valid social insurance number (SIN), you can save up to a set limit each year in your TFSA and pay no tax on the interest you earn.
Any savings interest you earn inside a TFSA is tax free and stays that way even when it’s withdrawn.
Your TFSA isn’t tied to a specific goal, so you can use it to save for any purpose. The choice is yours.
There are no restrictions on when you can withdraw TFSA funds, so you can take money out whenever you need.
TFSA contribution room is never lost. Unused amounts and withdrawals just add more savings room the following year.
Unlike other registered plans, you can keep contributing to your TFSA as long as you like. There’s no age limit.
You can customize your TFSA with many kinds of investments – mutual funds*, term deposits, even savings accounts.
A Tax Free Savings Account is a powerful tool for any type of savings but it’s particularly helpful in certain situations:
All-purpose saving – if you want the flexibility to save for many goals in one place.
Easy access – if you want to be able to withdraw your savings at any time without penalty.
Medium to long-term goals – If you don’t need your savings for a while. This maximizes how long they can grow tax-free.
Our handy calculator helps you visualize the benefits of investing in a TFSA over a regular, taxable account.
The TFSA contribution limit in 2023 is $6,500. Since the TFSA was first introduced in 2009, this contribution limit has steadily increased:
Year |
TFSA contribution limit |
| 2009-2012 | $5,000 |
| 2013-2014 | $5,500 |
| 2015 | $10,000 |
| 2016-2018 | $5,500 |
| 2019-2022 | $6,000 |
| 2023 | $6,500 |
Any Tax Free Savings Account contributions or withdrawals you make are reported to the Canada Revenue Agency (CRA). That way they can keep track of how much TFSA contribution room you’ve used and how much you have left. You can see this amount in your “My Account” on the CRA website.
If you go over your TFSA contribution limit, the Canada Revenue Agency (CRA) will impose a tax of 1% per month on the excess amount. This will continue until you either:
Withdraw all of it; or
It’s absorbed by an increase in your contribution room
How to withdraw from a TFSA will vary depending on your financial institution and the type of investments you hold in the account. If you’re unsure of the steps at Gulf & Fraser, don’t hesitate to reach out. Our advisors are just a live chat, video, or phone call away to help.
TFSA withdrawal rules are very flexible. You can withdraw money from your account at any time for any purpose tax free (though you’ll need to bear in mind restrictions for investments you hold in it). There’s also no limit on the amount you can take out.
However, there is one key TFSA withdrawal rule to be aware of – you must have unused TFSA contribution room if you want to re-contribute a withdrawal in the year it was made. This is because the amount you withdraw will only get added back to your contribution room at the beginning of the following year. So, if you’ve maxed out your TFSA, re-contributing will cause you to go over your TFSA contribution limit.
If you’ve maxed out your TFSA and withdraw $1,000 from it in 2023, you won’t be able to re-contribute that $1,000 until January 2024 without exceeding your TFSA contribution limit.
This is a great question, and the answer will vary for each person. To help you figure it out, here’s a breakdown of the key differences between the RRSP vs. TFSA:
TFSA |
RRSP |
| Can be used to save for any goal |
Can be used to save for retirement, education or your first home |
| You don’t need taxable income to accumulate contribution room |
You do need taxable income to accumulate contribution room |
| Contributions aren’t tax deductible |
Contributions are tax deductible |
| Withdrawals are tax free |
Withdrawals are taxed in the year they’re made1 |
| You can contribute at any age |
You can contribute up until the end of year you turn 71 |
Still not sure which registered plan is right for you? Don’t hesitate to reach out! Our advisors are just a live chat, video, or phone call away to help.
1 Except if the withdrawal is made as part of the Home Buyer’s Plan (HBP) and Lifelong Learning Plan (LLP) which are not taxed provided they are repaid within the required time.
A Registered Retirement Savings Plan (RRSP) is a powerful registered plan that helps you accelerate your retirement savings, while also reducing the income tax you pay.
If you have taxable income in Canada, you can save up to a set limit each year in your RRSP and defer tax on the interest it earns to help your money grow faster.
Your annual RRSP contributions are tax deductible. This means that the more you put into your RRSP the more you save on your tax bill each year.
Interest earned in your RRSP isn’t taxed until its withdrawn in retirement. At which point, you’ll likely be in a lower tax bracket and owe less.
You can borrow a portion of your RRSP savings to pay for further education or buy your first home, as long as you repay it within the required time.
You can customize your RRSP with many kinds of investments – mutual funds*, term deposits, stocks, bonds and more – to match your needs.
A Registered Retirement Savings Plan is an important retirement savings tool, particularly in certain situations:
Higher taxable income – if you’re in a higher tax bracket and want to reduce the amount you owe.
Minimal or no pension – if you don’t have other sources of retirement income.
Longer savings horizon – if you aren’t going to need to access the funds before retirement.
Our handy calculator helps you determine how much you’ll need to set aside for your dream retirement.
The current RRSP contribution limit (also known as the RRSP deduction limit) is $30,780 or 18% of the income you earned last year – whichever is less.
However, your personal RRSP contribution limit may be higher. This is because any contribution room you didn’t use in previous years is added to this amount. You’ll find your personal RRSP contribution limit on your last Notice of Assessment or by logging into your “My Account” on the Canada Revenue Agency website.
The RRSP deduction limit is another name for the RRSP contribution limit. It is $30,780 or 18% of the income you earned last year – whichever is less.
However, your personal RRSP deduction limit may be higher. This is because any contribution room you didn’t use in previous years is added to this amount. You’ll find your personal RRSP deduction limit on your last Notice of Assessment or by logging into your "My Account” on the Canada Revenue Agency website.
Accidental overcontributions can happen and The Canada Revenue Agency (CRA) is prepared for them. If you go over your contribution limit by $2,000 or less, you won’t be charged a penalty (note: this is a lifetime overcontribution allowance, not yearly).
However, if you overcontribute more than that $2,000 allowance, the CRA will impose a tax of 1% per month on the excess amount. This will continue until you either:
Withdraw all of it; or
It’s absorbed by an increase in your contribution room
This is a great question, and the answer will vary for each person. To help you figure it out, here’s a breakdown of the key differences between the RRSP vs. TFSA:
TFSA |
RRSP |
| Can be used to save for any goal |
Can be used to save for retirement, education or your first home |
| You don’t need taxable income to accumulate contribution room |
You do need taxable income to accumulate contribution room |
| Contributions aren’t tax deductible |
Contributions are tax deductible |
| Withdrawals are tax free |
Withdrawals are taxed in the year they’re made1 |
| You can contribute at any age |
You can contribute up until the end of year you turn 71 |
Still not sure which registered plan is right for you? Don’t hesitate to reach out! Our advisors are just a live chat, video, or phone call away to help.
1 Except if the withdrawal is made as part of the Home Buyer’s Plan (HBP) and Lifelong Learning Plan (LLP) which are not taxed provided they are repaid within the required time.
Under the federal Home Buyer’s Plan (HBP), you can withdraw up to $35,000 from your RRSP to buy or build your first home. This amount will not be taxed as long as you pay it back in full within 15 years of the withdrawal.
To learn more about the HBP and its requirements, book a chat with one of our advisors.
The Pooled Registered Pension Plan (PRPP) is designed to provide retirement income for those who don’t have access to a workplace pension.
It’s similar in many ways to the Registered Retirement Savings Plan (RRSP) – contributions are tax deductible, and it has the same deduction limits as the RRSP. However, because the investments are pooled, the PRPP usually has lower administrative costs.
Want to learn more? Book a chat with one of our advisors.
A Registered Retirement Income Fund (RRIF) is a registered plan that helps you manage your retirement income. In simple terms, it’s what your Registered Retirement Savings Plan (RRSP) can become once you retire.
When you retire or turn 71, your RRSP can be converted into an RRIF. At which point, instead of contributing savings to it, you can begin withdrawing money from it for all those retirement adventures you have planned.
Just like the RRSP, savings in your RRIF aren’t taxed until they’re withdrawn, so they can keep growing faster for you.
You can withdraw as much or as little as you want, as long as you take the minimum yearly requirement.
You can customize your RRIF with many kinds of investments – mutual funds*, term deposits, stocks, bonds and more.
You can convert your RRSP into an RRIF any time before the end of the year you turn 71, but there are some important factors to consider:
Do you want to keep saving? Once you’ve converted to an RRIF, you can’t make any more savings contributions.
Do you need the income? If not, it may be worth waiting and continuing to save tax-sheltered.
Will withdrawals affect your taxes? RRIF withdrawals are taxable, so they can bump you into a higher tax bracket.
Our handy calculator helps you estimate the payments you can expect from your RRIF each year.
No, you have three options for your RRSP savings:
Transfer them to an RRIF
Buy an annuity with them
Withdraw them
However, the final option is not generally recommended. This is because the withdrawn savings will be considered taxable income in the year you take them out, potentially increasing your tax bill significantly.
You’ll need to decide on an option by the end of the year you turn 71. If you’re not sure which is right for you, book a chat with one of our advisors. They’ll be happy to help you figure it out.
You don’t have to make any withdrawals in the year you set up your RRIF. After that, however, you must take out a minimum amount annually. This is based on your age as of January 1 each year. For example, if you’re 65 on January 1, you’ll need to withdraw 4% of your RRIF balance that year. If you’re 75, it will be 5.82%.
For a full breakdown of withdrawal minimums and advice on how to manage them, book a chat with one of our advisors.
Yes, any RRIF withdrawals are taxed as income. If you take out more than the required annual minimum, you’ll also need to pay withholding tax:
Amount above the minimum |
Withholding tax rate |
| Up to $5,000 |
10% |
| $5,001 to $15,000 |
20% |
| More than $15,000 |
30% |
For help minimizing tax on your RRIF withdrawals, book a chat with one of our advisors. They’ll be happy to help you build a personalized plan.
Yes, it’s up to you when and how often you make withdrawals from your RRIF. You’ll just need to bear in mind your annual withdrawal minimum and the withholding tax charged on any amounts over that minimum.
Yes, you can choose to convert your RRSP into a single RRIF or multiple. However, if you choose the latter, you’ll need to take out the minimum withdrawal amount from each plan. So it’s often easier and more convenient to consolidate your RRSPs into one RRIF.
A Registered Education Savings Plan (RESP) is a registered plan that helps you and your loved ones save up to $50,000 for your child’s post-secondary education, tax-sheltered.
As long as your child lives in Canada and has a Social Insurance Number (SIN), you can open an RESP and contribute savings, boosted by government grants.
Interest earned in an RESP grows untaxed until its withdrawn. At which point, it’ll be taxed to your child – who’ll likely owe little to nothing as a student.
Your savings may be eligible for over $10,000 in RESP government grants. That’s a huge boost to your child’s education savings.
Parents aren’t the only ones who can contribute to an RESP. Family and friends can also add to your child’s savings for school.
Your child can use the savings for more than just tuition. Anything related to their education counts, including living expenses and transport.
You can customize your RESP with many kinds of investments – mutual funds*, term deposits, stocks, bonds and even savings accounts.
A Registered Education Savings Plan is a great tool for helping children get ahead in life. It’s particularly useful when you have young children. There’s no age limit on opening an RESP, but saving early ensures you can maximize provincial and federal government grants.
Our handy calculator helps you plan how much to save for your child’s education costs.
There’s no annual RESP contribution limit. You can contribute as much as you like to your plan, up to a maximum of $50,000 per child. But, to maximize the Canada Education Savings Grant (CESG), we recommend putting in at least $2,500 a year.
Note: You can make contributions into an RESP until 31 years after it was opened.
Once your child is enrolled at a qualifying school, you can begin withdrawing money to pay for their expenses. These are called Education Assistance Payments (EAPs). They can be used for tuition, course materials and textbooks, living expenses, transportation and more – anything related to your child’s education.
There’s an $8,000 RESP withdrawal limit in the first 13 weeks of schooling. After that you can withdraw any amount your child needs. Just bear in mind that they’ll be taxed on withdrawals. But, since they’re students, they’ll likely owe very little if anything.
Universities aren’t the only institutions eligible for RESP withdrawals. Your child can use RESP savings for a wide range of educational programs – trade schools, apprenticeship programs, colleges, even international institutions can qualify.
For a full list of qualifying Canadian schools, take a look at the Government of Canada’s website:
To qualify for international study, your child must have been enrolled in the course for at least 13 consecutive weeks (3 weeks for university programs).
There are a number of RESP government grants you may be eligible for:
Who qualifies? Children under 18, who live in Canada and have a Social Insurance Number (SIN).
How much is it? The government matches 20% of your RESP contributions up to a maximum of $500 a year and $7,200 in total. Modest income families qualify for more grant funds.
Who qualifies? Children under 15 from modest income families.
How much is it? The government contributes $500 to your RESP in the first year you qualify and $100 each year after that.
Who qualifies? Children between six and nine years old, who live in British Columbia.
How much is it? The government will provide a one-time $1,200 contribution to your RESP, whether you make RESP contributions or not.
Want to make sure you maximize these RESP government grants? Book a chat with one of our advisors. They’ll be happy to help ensure your child gets all the extra incentives they qualify for.
No, sadly RESP contributions are not tax deductible.
In this situation, you’ll need to return any remaining RESP grant money to the government. But there are several things you can do with your unused RESP contributions:
Contribute to your RRSP – If you have contribution room, you can transfer up to $50,000 from your RESP into your RRSP without being taxed. To do this, your child must be over 21 and the plan must have been open for at least 10 years.
Change the beneficiary – If there’s another child you want to support, you can transfer the RESP over to them. How this is done depends on the type of plan you have (individual RESP, Family RESP, or Group RESP).
Close the RESP – This option comes with some tax implications. While your contributions can be withdrawn tax-free, any interest earned on them will be taxed at your current rate with a 20% penalty on top. To be eligible for this option, your child must be over 21 and the plan must have been open for at least 10 years.
Not sure what you want to do? Book a chat with one of our advisors. They’ll be happy to help determine the best option for you. And don’t forget, you have time to decide – the RESP can stay open for up to 35 years before it expires (or 40 years for certain specified plans).
A Registered Disability Savings Plan (RDSP) is a registered plan that helps those with disabilities and their loved ones save for long-term financial needs, tax sheltered.
If you or a family member are under 60 and qualify for the Disability Tax Credit (DTC), you can open an RDSP and save up to $200,000, boosted by government grants.
Interest and capital gains earned in an RDSP aren’t taxed until they’re withdrawn, helping your savings grow faster.
Your savings may qualify for government grants, including the Canada Disability Savings Grant and Bond.
RDSP withdrawals don’t factor into eligibility for BC Disability Benefits. So they won’t affect government assistance.
There are no restrictions on how RDSP savings are spent. They can be used for any need the person has.
Family members aren’t the only ones who can contribute to the RDSP. Friends can also add to the savings.
You can customize the RDSP with many kinds of investments – mutual funds*, term deposits, stocks, bonds and more.
Setting up a Registered Disability Savings Plan is a great way to ensure long-term financial security for a person with disabilities. It’s particularly beneficial for those who can start saving early to maximize the benefits of government grants.
Our handy calculators help you figure out which solutions make the most sense for your goals.
No, there’s no limit on how much you can contribute to an RDSP each year. But there is a maximum total limit of $200,000.
No, sadly RDSP contributions aren’t tax deductible.
There are two federal RDSP government grants you may be eligible for. They both depend on your household income:
Canada Disability Savings Grant – If you qualify, the government will add up to $3,500 a year to your RDSP and $70,000 total.
Canada Disability Savings Bond – If you qualify, the government will contribute up to $1,000 a year to your RDSP and $20,000 total, whether you contribute or not.
Want to find out more? Book a chat with one of our advisors. They’ll be happy to help ensure you access all the extra government incentives you can.
The plan’s beneficiary can withdraw funds in two ways:
Annual withdrawals – These are known as Lifetime Disability Assistance Payments (LDAPs). They begin by the end of the year in which the beneficiary turns 60 and continue for the rest of their life.
One-time withdrawals – These are known as Disability Assistance Payments (DAPs). They can be made any time after the RDSP is set up.
However, there are a few rules around RDSP withdrawals, so it’s best to chat with an advisor before taking money out.
Whether you’re just starting out or already have a growing portfolio, enjoy access to a full array of affordable investments professionally managed for you.
Take advantage of our wide range of stocks and bonds to build a powerful, diversified investment portfolio – guided by our accredited advisors.
*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.
The GFCU Savings call centre hours are open from 7:00am-7:00pm Monday to Friday and 8:00am-4:00pm on Saturday.
Local: 1-250-442-5511
Toll-free: 1-866-442-5511
Email: info@gfcu.com
©2024 Gulf & Fraser. All rights reserved. Gulf & Fraser and GFCU Savings are trade names of Beem Credit Union.
