TFSA growth/limit confusion
If I invest in TFSA and want to continue re-investing its dividend income for growth, Is the dividend's dividend going to come out of my next year's TFSA limit or it grows tax free? For example, if I invest 10K under TFSA and make 20% in dividends and then automatically buy more stocks using the income (i.e. 2K). Next year I earn 50% and now I have 1K more. Again, I decide to invest 1K as well and make more money following year. All this sum is going to grow tax free or it will come out of my yearly TFSA limits?
In other words, TFSA's revenue is your tax free money but what about the money earned from that tax free money? How far are you allowed to go?
RRSPs grow tax free and re-investing the earned dividends dont come out of that year's RRSP limit, not sure about TFSA.
In other words, TFSA's revenue is your tax free money but what about the money earned from that tax free money? How far are you allowed to go?
RRSPs grow tax free and re-investing the earned dividends dont come out of that year's RRSP limit, not sure about TFSA.