TFSA vs Savings account
 

Noob question here regarding banking. Currently I just have a regular checking account. I'm on the verge of paying off all my debts and will start putting money away on a monthly basis to save for random stuff like vacation, big purchases etc. Money would normally maybe be in there for a short period of time (under a year) before each time I clear it out and make my purchase. Also the amount won't be anything crazy like 10's of thousands, more like $1000 - $2000 here and there. Pros and cons between the 2 accounts?

Not to be harsh or mean....but you might want to consider searching the web about this. Or visit your bank's website / branch. There's LOTS of information out there. http://tinyurl.com/47owtln

Educate yourself a little more on the subject first, then come back and ask any questions you might have.

I was just being fucking lazy haha. When I try reading this financial type stuff I don't understand half the shiet their talking about and well thought maybe a quick answer here would be faster then going into the bank and waiting to talk to somebody.

Any money you put into a TFSA can be withdrawn at anytime, but once you make a withdrawl, you're not allowed to make any more contributions until the next year. Any intrest earned in the TFSA, is kept and is not classified as "income" there for you don't pay tax. Having said that only having $1000-$2000, the intrest accumulated won't be very much.

Considering your plan to save up a few $Ks then liquidate it each year, just stick with a high interest savings account. I've never had the interest in these accounts taxed for a few $Ks, so setting up a TFSA is not worth while.

If you want to get into investing and accept that what you save might go up or down, then that's a different story. That's when you should open a TFSA and start buying mutal funds. Mutual funds can be sold within a few days, yet you may not beable to sell the savings you've deposited in the last 90 days.

People will advise you against mutual funds since they have a fee of ~2%, yet they have no cost to purchase/sell. Since you're only saving $1-200/mn, you cannot afford the $10/transaction to buy/sell stocks, ETFs, ...

Thanks for the replies guys it has been helpful.