If I haven't maxed out my TFSA, should I be sending my monthly expenses money there?
AFAIK the overcontribution is calculated monthly, so even if I send a bit more money there as long as I take it out at the end of the month I should be fine, correct?
Or should I keep this kind of money in normal savings accounts to not mess up with the contribution room?
this post was submitted on 02 Oct 2023
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I'm unsure what you mean by "the overcontribution is calculated monthly," but according to canada.ca:
At any time in the year, if you contribute more than your available TFSA contribution room, you will have to pay a tax equal to 1% of the highest excess TFSA amount in the month, for each month that the excess amount remains in your account.
This means that if you overcontribute at any point during a month, you'll incur the penalty for that month. Withdrawing the excess amount by the end of the month won't avoid the penalty for the current month, but it will prevent it for the subsequent month. Moreover, if you make substantial gains from this overcontribution, the CRA could claim all of it.
So, I don't see any advantage in what you're trying to do.
Ah, yeah, that was my question, so I need to be careful to not overcontribute at any point, is not like there's a date where the balance is checked.
Thanks for the clarification!