What is a Tax-Free Savings Account (TFSA)?

A TFSA is a Canadian savings account that allows you to earn interest, dividends, and capital gains without having to pay taxes on your returns or withdrawals.

How much can I contribute to a TFSA?

The annual contribution limit for a TFSA is $6,500 for 2024. Unused contribution room can be carried forward indefinitely.

Can I withdraw money from my TFSA?

Yes, you can withdraw money from your TFSA at any time, and the withdrawals are not taxed. Additionally, withdrawn amounts are added back to your contribution room the following year.

Is the money I withdraw from my TFSA taxable?

No, the money you withdraw from a TFSA is not subject to tax. It is one of the key benefits of having a TFSA.

Can I contribute to a TFSA if I’m over 18?

Yes, any Canadian resident who is 18 years or older with a valid SIN can contribute to a TFSA, subject to annual contribution limits.

What happens if I exceed my TFSA contribution limit?

If you exceed your TFSA contribution limit, you will be charged a penalty tax of 1% per month on the excess amount until it is withdrawn or corrected.

Can more than one person contribute to a TFSA?

No, only the account holder can contribute to their own TFSA. However, others can gift money to you, but the contributions must be made by you.

What are the investment options in a TFSA?

You can invest in a variety of assets within a TFSA, including savings accounts, GICs, stocks, bonds, mutual funds, and ETFs.

Tax-Free Savings Accounts (TFSA) in Canada: Grow Your Savings with Tax-Free Benefits

Grow your money tax-free—for any goal, at any age.

A TFSA is one of the most flexible and powerful savings tools available to Canadians. Whether you're saving for a home, car, vacation, emergency fund, or retirement, the money you earn inside a TFSA is completely tax-free —no matter how much it grows or when you withdraw it.

It’s not just a savings account—it’s an investment account with zero tax on your gains.

How Does a TFSA Work?

You contribute up to your annual limit (e.g., $7,000 in 2024 )
Any investment growth (interest, dividends, capital gains) is not taxed
You can withdraw funds at any time, for any purpose, tax-free
Any amount you withdraw is added back to your contribution room the next calendar year
Unused contribution room carries forward indefinitely

You must be:

A Canadian resident
18 years or older with a valid SIN

Why Open a TFSA?

Save for short-term or long-term goals
Use it as a rainy day fund, retirement supplement, or investment account
Enjoy tax-free growth and withdrawals —no income reporting required
Unlike RRSPs, TFSA withdrawals don’t affect your eligibility for government benefits (like OAS or GIS)
Perfect for all life stages—students, young professionals, families, and retirees

What Can You Hold in a TFSA?

A TFSA can hold more than just cash—it’s an investment vehicle. You can hold:

GICs (Guaranteed Investment Certificates)
Mutual funds
Stocks and ETFs
Bonds
Segregated funds (through insurance-based plans)

This flexibility lets you choose how conservatively or aggressively you want to grow your money.

TFSA vs RRSP

Feature	TFSA	RRSP
Contributions	Not tax-deductible	Tax-deductible
Withdrawals	Tax-free	Taxable as income
Income reporting	Not required	Required upon withdrawal
Impact on benefits	No impact	May reduce government benefits
Best use	Short/long-term saving & investing	Retirement-focused, income smoothing

Many Canadians use both to get the full range of tax advantages.

Key Features

Annual limit (2024): $7,000
Lifetime limit (as of 2024): $95,000 (if eligible since 2009)
Withdraw anytime —no penalties or taxes
No impact on income-tested benefits
Available through banks, credit unions, or insurance providers
Can be used for any financial goal

Build wealth on your terms—with zero tax.

We’ll help you set up a TFSA that suits your goals and risk profile, whether you're saving for your future, investing in the markets, or just putting money aside for a rainy day.

TFSA (Tax-Free Savings Account)