TORONTO, ONTARIO--(Marketwire - Jan 15, 2013) - As Canadians ring in the New Year with an additional $500 of Tax Free Savings Account (TFSA) contribution room, BMO is also offering more incentive for those looking to use the popular savings and investment vehicle.
Until April 30th, 2013, BMO is offering a 2.25 per cent interest rate on net new deposits to a BMO TFSA Savings Account - the highest rate currently offered by a major financial institution in Canada.
"In 2013, while it''s important that Canadian households focus on reducing their debt loads - currently at record highs - it is also important to continue to save for their future financial goals," said Domenic Gallippi, Head, Term Investments, BMO Bank of Montreal. "With this market-leading rate, we want to encourage Canadians to take advantage of this fantastic savings vehicle and ultimately grow their savings in 2013."
According to the BMO Annual TFSA Report, fewer than half (44 per cent) of Canadians are making the maximum annual contribution to their Tax-Free Savings Account (TFSA), but the majority (57 per cent) plan to contribute the maximum allowable amount within the next five years. For 2012, the report showed Canadians planned to contribute an average of $3,778 to their TFSA.
"Contributing to a TFSA is a sensible option for all savers and investors," said Mr. Gallippi. "TFSA plans give Canadians flexibility for short and long term financial goals."
Furthermore, the report revealed that since its introduction in 2009, 39 per cent of Canadians have opened a TFSA. The most common TFSA investment is cash savings, with the majority (60 per cent) including cash in their TFSA. Mutual Funds and Guaranteed Investment Certificates (GICs) are the second most popular TFSA investments, with one quarter (26 per cent and 25 per cent respectively) including them in their portfolios.
BMO will be offering the special rate of 2.25 per cent for net new contributions made to a TFSA Savings Account until April 30th, 2013.
- Canadians aged 18 and older can contribute up to $5,500 this year into a TFSA. Last year, the federal government raised the annual Tax-Free Savings Account (TFSA) contribution limit by $500, taking effect in 2013. Any unused contribution room from the previous year can be added to this year''s contribution room. In addition, any withdrawals can be re-contributed the following year without affecting the annual contribution limits.
- You can hold the same investments in a TFSA as you could in a Registered Retirement Savings Plan (RRSP), including GICs, bonds, cash, mutual funds and stocks.
- Contributions to TFSAs are not tax deductible, however any income earned through interest, dividends or capital gains are tax-free.
To learn more about BMO Tax Free Savings Account, please visit www.bmo.com/home/personal/banking/investments/tax-free/tfsa.
Research for the BMO Annual TFSA Report was conducted by Pollara and completed between October 11 and October 16, 2012, with a sample of 1,000 Canadians. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $525 billion as at October 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.