Welcome back to my blog! Today we’re going to talk about one of the best investment options every Canadian over the age of 18 has ” The TFSA”

It is a fantastic tool for saving and investing for the future, allowing you grow your money without paying taxes.

However, to make the most of your TFSA, it’s important to understand the value of it and know your contribution limits.

 In 2023, the contribution limit is $6,500 per year, and if you haven’t used up your contribution room in previous years, you can carry it forward.

If you have never invested in a TFSA before, your contribution limit for 2023 will be the cumulative limit for all the years since the TFSA was introduced, which is currently $75,500. Plus $6500 for this current year.

The contribution limit for each year is determined by the federal government and may change from year to year.

It’s also worth noting that any withdrawals made from the account will not affect your contribution room for future years.

Now, let’s talk about the best types of stocks to invest in through your TFSA. Generally, if you are younger and just starting out then stocks with high growth potential are the best choice as they offer the opportunity to make significant gains over time.

However, it’s also important to consider diversification and risk management when choosing stocks for your TFSA.

It’s also important to note the USA or International stocks will have taxes withheld at the source for all dividends paid. If possible it’s best to keep your TSFA filled with Canadian Stocks. US Stocks should be held in your RRSP.

Here are a few top stock picks for TSFA investments with good ratings:

1. Enbridge Inc. (ENB.TO) – Enbridge is a North American energy infrastructure company that operates in the oil and gas industry. The company has a long history of stable and growing dividends, which makes it a popular choice for income-seeking investors. Enbridge has also been investing in renewable energy projects, which could provide further growth opportunities in the future. Enbridge would be a great stock to also hold outside your TFSA in a Non-Registered account as the dividends are eligible for the Dividend Credit for Canadian Dividends.

• Telus Corporation (T.TO) – Telus is a telecommunications company that provides wireless and wireline services in Canada. The company has a strong market position and a loyal customer base, which has allowed it to consistently deliver solid financial results. Telus is also committed to sustainability.  It is also a great stock for either your TFSA or your Non-Registered Account.
• Canadian National Railway (CNR.TO) – As a leader in the transportation industry, CN Rail is a great choice for investors seeking stable and consistent returns. Its solid financials and diversified operations make it a reliable long-term investment.

Remember, it’s important to conduct your own research and due diligence before making any investment decisions. Always consider your own investment goals, risk tolerance, and time horizon when selecting stocks for your TFSA. Consider the different accounts you have, and which stock fit best in each account. All 3 stocks are considered great investment Canadian Stocks and would be a great fit for both fit for all your accounts.

Where can you start your tax free savings account?

Opening a TFSA in Canada is a relatively straightforward process.

1. Choose a financial institution: You can open a TFSA at any financial institution that offers the account, such as a bank, credit union, or investment firms and online Brokers such as Wealth Simple. Research different institutions to find one that meets your needs.
2. To open a TFSA, you will need to provide some personal information, such as your name, address, and social insurance number.
3. Complete the TFSA application. This can often be done online or in-person at a branch of the financial institution.
4. Choose your investments: After your TFSA is set up, you can choose the investments you want to hold in the account. Depending on the financial institution, you may have access to a variety of investment options, such as mutual funds, stocks, bonds, or savings accounts.
5. Make contributions: Once your TFSA is open and your investments are chosen, you can make contributions to the account. Keep in mind that there are contribution limits each year, so be sure to stay within those limits to avoid penalties. Penalties can be steep! We will talk about that another time!

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