TFSA vs. non-registered account

The income earned in your TFSA is tax-free, which is not the case for a non-registered account. The table below shows the advantages of a TFSA versus a non-registered account.

Example:

    Non-registered account   TFSA  

Monthly contribution 

 

$100

 

$100

 

Time period (years) 

 

20

 

20

 

Rate of return1

 

5.50%

 

5.50%

 

Income tax rate

 

26.00%

 

0,00%

 

Account balance after 20 years

$36,679

$43,078

 

Total contributions over 20 years

$24,000

$24,000

 

After-tax investment income

$12,679

$19,078

 
  You would pay $6,399 less
in taxes with a TFSA
($19,078 - $12,679 = $6,399)
graphique_celi-vs-sansceli

Calculations are for information purposes only: they illustrate the impact of lower taxes payable on TFSA revenue during an investment period under identical conditions. Actual returns on investments may be higher or lower than in this example and will vary according to investment type and time period. The data shown here is for information purposes only and does not create any legal or contractual obligation for National Bank or its subsidiaries.

    

1 Effective annual rate of return compounded annually thereafter