Staff
Fifty-three percent of Canadians still haven’t opened a tax-free savings account (TFSA), and 42% of those without one don’t intend to open one this year, according to an ING Direct survey.
For 52% of those who still don’t have a TFSA, not having money to contribute was cited as the main reason they haven’t opened one.
The survey also finds the following:
- 31% of Canadians admit they still don’t understand how TFSAs work;
- 38% are unsure about the current annual contribution limit;
- retirement savings continue to be the main reason Canadians use TFSAs for 46% of respondents;
- of those ages 18 to 34, 31% plan to use their TFSA for purchasing a home;
- of the 47% of survey respondents who have opened a TFSA, 19% are approaching the contribution limit; and
- when looking at how Canadians are contributing, a lump sum deposit one to two times a year is most popular with 52%, while 26% contribute to their TFSA on a monthly basis.
“In addition to not paying tax on earnings on TFSA investments, another benefit is the flexibility of a TFSA—no penalties for withdrawing money and the ability to carry over unused contributions—which makes it a great way to save for both short-term and long-term goals,” says Silvio Stroescu, head of investments and savings at ING Direct.
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