This post answers the question: “Can I have a joint TFSA?”. You’ll also learn whether you can contribute to a spouse’s TFSA and a few alternatives to joint TFSAs.
Can I have a Joint TFSA?
A TFSA can only be opened and held by one person. Also, the TFSA accountholder is the only person that can contribute to the account. Therefore, you cannot have a joint TFSA account with your spouse or any other person.
You can, however, give someone the money to contribute to their TFSA, designate them as a beneficiary or successor holder or open a non-registered investment account with them.
Related Post: TFSA FAQs
Can I contribute to my spouse’s TFSA?
You cannot contribute to your spouse or another person’s TFSA directly. With TFSAs, only the accountholder can contribute to their own account subject to their contribution limit.
However, you are allowed to give your spouse (or any other person) the money and they can make the TFSA contribution on their own.
This means that the money you gift to your spouse will not be attributed to you or reduce your limits – like it works for RRSP spousal contributions.
Learn more here: Can I contribute to my spouse’s TFSA?
Alternatives to Joint TFSAs
So while you can’t open a joint TFSA with your spouse or any other person, here are some other options you can consider:
a. Give them the money
This is pretty straightforward and requires no documentation. You can simply gift the money to your spouse or any other person to contribute to their own tax-free savings account.
The contribution will reduce their TFSA contribution limit and not your own. And since the withdrawals are tax-free, they also won’t impact you in anyway.
However, there are a few attribution rules to be aware of especially if the withdrawn amount is reinvested. This post provides a good overview of these TFSA attribution rules.
b. Designate them as a beneficiary or successor holder
Another alternative to joint TFSAs is simply designating the other party as a beneficiary or successor holder of your TFSA.
While you can designate anyone as a beneficiary, only a spouse or common-law partner can be a successor holder.
Even if you’re not thinking of opening a joint TFSA, naming a beneficiary on your TFSA contracts is highly recommended unless you live in a province (Quebec) that does not recognize it.
Without the designation, the value of your TFSA will be added to your estate when you pass and may create extra administrative stress for your loved ones.
Learn more about TFSA Beneficiary and Success holder designation here.
Related Post: TFSA Mistakes to Avoid
c. Open a Non-registered Joint Account
If you’ve both maximized the contribution room in your registered accounts, you can open a non-registered investment account as an alternative to a joint TFSA.
Luckily, many brokerages including Questrade and Wealthsimple will let you open a joint investment account. And if you’re looking for a high interest savings account, you can also consider EQ Bank Joint Account.
A joint account can be opened with a spouse, friend, business partner and so on.
Related Post: Best High Interest Savings Accounts