TFSA - What exactly is it?

[frugalmaple]

Hey there fellow newcomers to Canada! If you're looking to make the most of your savings and investments, let me introduce you to the wonderful world of Tax-Free Savings Accounts (TFSAs). As a new immigrant, understanding the Canadian financial landscape can be overwhelming, but TFSAs are a great tool that can help you grow your wealth in a tax-efficient way.

If you are looking to invest for the first time in Canada, DO NOT create a trading account as a first step which is a mistake I made when I first thought of investing. TFSA is a type of registered account that allows you to save and invest money without paying taxes on any gains or income earned within the account. You want to first maximize your TFSA contributions before using a separate trading account.

I've written a blog about it here with some detailed examples and numbers. The post is a little too long to paste here in the forum. Make sure to bookmark it. I'll regularly be posting more finance tips on my Instagram (@frugalmaple) so keep an eye out for more useful information.

 

[expert_law]

Hello,
Can anyone help me with this - I received an educational letter from CRA on TFSA over-contribution. As per the letter, I have exceeded the TFSA contribution for 2022 by $9,000. So far, they are not charging penalty for this over-contribution. When I checked my CRA account it showed me that my contribution as of 1 Jan 2023 is only $2,500 (I guess this is due to the fact that a contribution room of $6,500 was added on 1st Jan 2023).

In this scenario, I have 2 questions:
a) What amount do I need to take out from my TFSA ($9,000 or $2,500) ?
b) How much time I have to withdraw the money (received the letter from CRA on 18th June 2023)? The money in TFSA is in form of Non-redeemable GIC and it is set to mature end of July'2023.

Thank you