Tax-free savings accounts just got a bit more attractive to Canadian savers and investors -- too bad the $500 increase will likely go ignored.
The federal government announced Monday the TFSA contribution limit will rise from $5,000 to $5,500 beginning Jan.1, 2013. This is the first time TFSAs have been indexed for inflation, which occurs in $500 increments, the government said.
"Our Government remains committed to our low-tax plan for jobs and growth and we are very pleased to offer Canadians ways to save on taxes and keep more of their hard-earned money," Ted Menzies, minister of state (finance) said in a release. "TFSAs have become an exceedingly valuable savings tool for so many Canadians."
The government even released a handy chart to demonstrate the benefits of the tax-free account, stating: "A middle-income saver could accumulate about $2,340 more in tax savings on their investments than if the additional investment had been made in a taxable savings vehicle (unregisteredRead More »from TFSA limit rising to $5,500 in 2013