Just looking at the calendar there is only a few weeks left until we get to open a tax fee savings account. With that in mind, I was just trying to think of sources where I would get money to place into the account. Here were my immediate thoughts:
Traditional Savings Account– This one seems like the most logical choice where if you have money in a regular savings account it only makes sense to transfer it to a TSFA account. Considering the banks overall should offer a higher interest rate on top of the fact that what you earned wont be taxed, I can’t see any real reason why you wouldn’t want to transfer it.
Tax Credit Cheques – I usually get one of these after filing my taxes and normally I would just place them into my savings account. Similarly, it seems like the wise thing to do would be to put it into a new TSFA account.
Investment Transfers – The article I was reading the other day about how some firms will be automatically transferring its GIC rates to the new tax free savings account plans is another idea. I remember before when I had GIC’s it was pretty discouraging to see how little you gained once you pull the funds out and claim it as your income. So this could be a great option for some too.
Emergency And Rainy Day Funds – I know many people actually setup an account specifically for emergencies and is entirely separate from their chequing and savings accounts. This never made too much sense to me as you could be earning more by combining it with your other funds. But if one insists and considering most people keep well over $1000 in it, putting it into a TFSA should make sense since you can withdraw the money at any time.
Making Extra Money On the Side – I am definitely going to use this method as well. If I want an additional $5000 a year to save into this account, I’m guessing it’s not enough to just save or cut back on certain things. Instead, I will probably need to find another source of income specifically for it.
If you have any tips or ideas that you will be implementing, feel free to share it as I’m sure it will help everyone too.