It’s no secret that saving money is important. There are so many reasons why it’s important to be setting aside money and making sure that you’re planning for the future. From paying off debt to saving for retirement, opening a savings account is something you should strongly consider if you don’t already have one.
Many people that are wanting to open a savings account wonder how that would impact their taxes. This is something that’s important to keep in mind, as savings accounts can vary in regards to taxes. Let’s go over what tax-free savings accounts are and if they could be the right financial choice for you.
Tax-Free Savings Accounts
If you’re eighteen or over, then you should consider opening a tax-free savings account. The only other qualification is that you must have a SIN. One of the biggest reasons to get this type of account is so that you can benefit from the interest that will accrue over time. Starting to save when you’re younger can have amazing results later in life, especially during retirement. Many start planning for retirement early, so consider if this type of savings account could be the right choice for you.
It’s important to understand the true ramifications that this type of account can have in regard to taxes. The amount that you put into the account will not impact your income tax for the year. The part that is tax-free is the amount that’s made off of interest.
There are different types of tax-free savings accounts. Which one you choose will depend on your goals and why you’re saving. It’s important to think about what the purpose of this account will be before you enroll so that you can decide the best account structure for your individual situation.
Ready to Learn More?
If you’re curious about starting to save and want to know more about what your options are, we can help. We’re here to make sure that you have financial guidance and we can also provide you with valuable information about the different choices available.
Financial decisions can be overwhelming, so let us help you. Feel free to reach out to us today and we can help you decide what the best options are for your needs. We look forward to hearing from you and making sure that you’re on the right savings track. Consider FiduSure Financial for all of your saving needs.