Tax Free Savings Accounts (TFSA) allows you to earn interest on your investments for free, and is a government program. In addition, individuals do not have to pay tax on the money that is withdrawn from their TFSA. Creating a TFSA is an excellent option for not only establishing but maintaining an emergency fund.
Your money will grow in this fund without you having to pay fees, and you will be able to withdraw from it without penalty, and the process is relatively easy. This means you will have access to your money when you need it. In addition this is also a great fund to create to prepare for costly annual bills, like property tax or tuition fees, and annual events such as holiday shopping.
By making a small contribution each month to your TFSA, you will be better prepared when these expenses or emergencies come up. Finally, a great benefit of the TFSA is the fact that it will protect your investments from being taxed. Instead of establishing something like an Income Trust, which can have many stipulations and can cost a lot when taxes are due, a TFSA is a better option. Protect your money, earn interest, and reduce fees with a Tax Free Savings Account.