Invest or keep money in cash? 41% of young Canadians opt for latter in TFSA
Global News
New survey data suggests Gen Z and millennials who use a tax-free savings account aren't investing in that account because they want the money readily available.
As younger Canadians struggle with the heightened cost of living and a difficult job market, a new survey from TD Bank suggests Gen Z and millennials who use a tax-free savings account (TFSA) aren’t investing in that account because they want the money readily available.
That comes as young Canadians continue to face an unemployment rate that is more than double the national average as of last month, according to recent Statistics Canada data.
Forty-one per cent of Gen Z and millennials who currently hold a tax-free savings account are not investing the money inside it, the TD survey found.
And while that number is higher, they aren’t the only ones.
The survey also says 65 per cent of all Canadians hold a TFSA, but 39 per cent of them are not investing the money inside.
Introduced during the Great Recession, the tax-free savings account was launched in 2009 and acted as a way to encourage Canadians to invest for retirement and other milestones.
A TFSA acts as a tax shelter, allowing Canadians to put a certain amount of money into their account and, if they want, use that to invest in things like stocks, bonds, GICs and mutual funds.
All of the money earned through those investments is free from taxes like capital gains as long as the money used to invest came from the TFSA.
