TORONTO, ONTARIO — (Marketwire) — 11/26/12 — While fewer than half (44 per cent) of Canadians are making the maximum contribution of $5,000 per year to their Tax-Free Savings Account (TFSA), a new poll released today from BMO Bank of Montreal reveals the majority (57 per cent) plan to contribute the maximum allowable amount within the next five years. For 2012, the report shows Canadians plan to contribute an average of $3,778 to their TFSA.
Additionally, the report revealed:
“Anyone who earns taxable interest can turn it into tax-free interest with a TFSA, making it a suitable and sensible option for just about any type of investor,” said David Heatherly, Vice President, BMO Bank of Montreal. “Furthermore, the flexibility of this product allows Canadians to use a TFSA to its full advantage for any financial goal, be it short or long term.”
Gaps Remain in TFSA Knowledge
However, since the TFSA-s introduction in 2009 by the Federal Government, a lack of knowledge about it persists. While 60 per cent of Canadians say they are knowledgeable about this savings and investing vehicle, only 44 per cent of Canadians correctly identified the annual maximum contribution limit of $5,000. Furthermore, 37 per cent of Canadians say they do not know what investments can be held within a TFSA, and the majority of TFSA holders are unaware that bonds, stocks, and ETFs can be included in their account.
“Federal Finance Minister Jim Flaherty introduced the TFSA four years ago and it is a fantastic savings vehicle. However, the findings suggest it-s still a fairly new concept for some,” added Mr. Heatherly. “With Financial Literacy Month upon us, now is an ideal time for Canadians to learn more about how TFSAs can help to grow savings tax-free and offset the taxes they pay on their overall investment profits.”
TFSA Basics:
To learn more about BMO-s TFSA offering, please visit .
The Pollara online survey was 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 $542 billion as at July 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.
Contacts:
Media Contacts:
Matt Duffin, Toronto
(416) 867-3996
Valerie Doucet, Montreal
(514) 877-8224
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(604) 665-7596
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