TFSA Limit Increases

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    Canadians can save an additional $500 in their Tax-Free Savings Account (TFSA) starting in 2013, following a raise in the annual contribution limit to $5,500, says Ted Menzies, Minister of State (Finance). Since the Harper government made TFSAs available in 2009, Canadians have been able to earn tax-free investment income on contributions of up to $5,000 per year. All Canadians can earn tax-free income through a range of investment products. TFSAs have become increasingly popular and approximately 8.2 million Canadians have opened an account. Roughly 2.5 million Canadians contributed the maximum amount in 2011. When the TFSA was introduced, the government announced that the annual contribution limit would be indexed to inflation in $500 increments. The upcoming raise is the first such increment.