TFSAs for Buying Stocks

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This article discusses using TFSAs for investing in stocks

As they have been around for quite some time now, most people in Canada are aware of the existence of TFSA banking accounts. They are an excellent way to totally avoid paying capital gains taxes on your banking interest income. But most people are not aware that you can use a TFSA for stock investments (and many other things).

Tax Free Trading Accounts are now available from most major brokers in Canada.

Unlike a TFSA bank account, the amount you can earn, tax free, is virtually limitless. However, the CRA has stated recently that they will be cracking down on individuals who treat their TFSA as a day-trading instrument. How exactly they enforce this is unclear to us.

How it works

It basically follows all of the same rules of a TFSA banking account. You can contribute to it once per year and the maximum you can contribute overall increases yearly

Our advice is to maximize your TFSA with any income tax paid money before you invest elsewhere. The absence of capital gains is simply too attractive to pass up!