Half of Canadians are unsure what they can hold in a tax-free savings account (TFSA), finds a CIBC poll.
Only a small percentage of Canadians able to accurately identify mutual funds (29%), GICs (28%), bonds (23%) or stocks (22%) as being investment options for TFSAs.
The poll also finds that Canadians are confused about TFSA contribution rules, with 38% saying they don’t know what happens to unused TFSA contribution room and another 13% who think the unused contribution room is lost after the current tax year.
Read: Canadians confused about TFSAs
“Investors stand to leave a lot of money on the table if they don’t fully understand the investment options and tax considerations related to TFSAs,” says Jamie Golombek, managing director, tax and estate planning, CIBC Wealth Advisory Services.
Key findings
Percentage who say the following statements were true based on their current understanding of TFSAs:
| All | 18-34 | 35-54 | 55+ | |
| I can hold cash in an interest-bearing savings account in a TFSA | 40% | 37% | 38% | 45% |
| I can hold mutual funds in a TFSA | 29% | 27% | 28% | 32% |
| I can hold shares of companies listed on a public stock exchange in a TFSA | 22% | 21% | 18% | 26% |
| I can hold guaranteed investment certificates (GICs) in a TFSA | 28% | 24% | 28% | 33% |
| I can hold bonds in a TFSA | 23% | 21% | 22% | 27% |
| I’m not sure what I can hold in a TFSA | 50% | 52% | 53% | 46% |
Read: Higher TFSA limit prompts some Canadians to save more
Percentage of Canadians on what happens when you don’t contribute the maximum amount to your TFSA:
| All | 18-34 | 35-54 | 55+ | |
| Unused contribution room is carried forward and accumulates in future years | 49% | 44% | 49% | 55% |
| Unused contribution room is lost after that tax year | 13% | 17% | 12% | 10% |
| I don’t know | 38% | 39% | 39% | 35% |
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