Hi Dan, I am thinking of adding Visa to my TFSA portfolio-does it make sense?

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Should I add Visa to my TFSA portfolio?

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Asked on April 17, 2024 8:57 am

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Hey there. I just added a core position in Visa not too long ago. I really do like the company.

From a TFSA perspective, I guess all I would say is you will still be charged with 15% withholding tax on the dividend inside of a TFSA. That would be why I'd try to get it into a withholding tax sheltered account like the RRSP however I do realize everyone's tax situation is a bit different and this may not always be plausible.

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Posted by Dan Kent

Answered on April 17, 2024 1:18 pm

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Another consideration is doing the math on what tax bracket you think you would fall into at retirement vs the 15% withholding tax you'll pay on holding VISA in your TFSA. I consider VISA to be a high growth stock, so is it a better idea to pay 15% on the dividend in a TFSA OR put it into your RRSP and pay no taxes on the dividend BUT get taxed on every dollar you withdraw at your retirement income tax rate?

(Denise LeBelle at April 17, 2024 1:29 pm)

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That is absolutely something to consider as well. When you think about it, the dividend yield being only 0.77%, if you're bullish on Visa's growth potential, the withholding tax is so minimal that a TFSA would be strong as well.

(Dan Kent at April 17, 2024 1:31 pm)

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RRSP contribution is not an option for me. In a higher tax bracket so, so TFSA is a better option, I think

(Prem Grainger at April 17, 2024 2:21 pm)

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