Tuesday, 27 October 2009

TFSA Account Adoption Creeping Steadily Up

RBC has just released a survey that shows the number of Canadians opening TFSA accounts is climbing steadily and is now at a quarter of eligible (18+) Canadians. Back in April Jonathan Chevreau had reported in his Wealthy Boomer blog that 20% had opened accounts to that point. The good news is that most people - over 70% - are mostly aware of the TFSA. Hopefully, the slow to act will soon join the list ... hint to some members of my family!

It was a wonderful coincidence that the January 1st start-up date more or less marked the bottom of the equity slump so those who were quick to jump in have seen a very healthy return so far - my initial $5000 evenly split between XIU and XMD has risen 33% or so since my account opened in February, a great tax-free return.

Maybe more Canadians should be a little more adventurous than the cash savings and the GICs that dominate TFSA account holdings according to RBC. Interest rates are so low that there isn't much point to tax-free savings if there isn't any income generated. RBC's headline to its press release - Why aren't Canadians taking advantage of tax free savings accounts? - is true in more ways than one.


Anonymous said...

I opened my tfsa account a year ago. I put 5 grand into it and managed to turn it into 13 grand over one year, trading stocks on canadian and usa stock exchanges. And all profits are tax-free. I am loving it.

CanadianInvestor said...

congratulations, anon. my own has risen strongly too, though not to your degree. Though I did not do it, it would almost have been worth it to cash it all in, and withdraw the money, thus establishing a new permanently higher contribution room. If done at the end of the year, the funds could then have been recontributed now the new year has started ... along with the new $5k permitted for 2010.

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