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Borrow money to max out TFSA? (lemmy.world)

submitted 3 weeks ago by LucidLyes@lemmy.world to c/personalfinancecanada@lemmy.ca

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I've just heard of someone doing that and it ended badly, but that was because the person over contributed. I wonder if it would be legal/smart for me to do that? I don't make enough to max out my TFSA and don't take risks investing (only invest in global ETFs and bonds).

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[–] bambootstrap@lemmy.ca 4 points 3 weeks ago (4 children)

It all depends on how cheap it is for you to borrow. My feeling is you’re unlikely to make more investing in bonds and “safe” ETFs than you’d pay in interest. In other words, you’d be paying more in interest than you’d be making in gains from your investment.

[–] LucidLyes@lemmy.world -1 points 3 weeks ago (1 children)

I invest in VEQT.TO and XBB.TO. I use 65% stocks and 35% bonds. I did make a profit last year but this year's probably not gonna be as good so I'd just be losing on interests. I think it's not even legal to use borrowed money in a TFSA anyway

[–] bambootstrap@lemmy.ca 2 points 3 weeks ago

It is legal but the interest on the loan is not tax-deductible, unlike other investment loans you might take out.

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