TFSA — Tax-Free Savings Account
Every dollar of growth is tax-free, and withdrawals never count as income.
The TFSA is the most flexible registered account in Canada. Contributions are not deductible, but nothing inside is ever taxed and nothing you withdraw is treated as income — which means it does not claw back Old Age Security, the Guaranteed Income Supplement or any income-tested benefit.
Contribution room has accumulated every year since 2009 for anyone who was 18 or older and resident in Canada, whether or not they ever opened an account. Withdraw in one year and the same room comes back on January 1 of the next, so it works equally well for an emergency fund and for long-term growth.
Who this is for
- Anyone 18 or older resident in Canada
- Savers who may need access to the money before retirement
- Retirees protecting OAS and GIS from clawback
- Lower-income earners for whom an RRSP deduction is worth little
What you get
Completely tax-free growth
No tax on interest, dividends or capital gains, and no tax when you take the money out.
Withdraw anytime
No penalty, no minimum holding period and no tax consequence. The most flexible account available.
Room is restored the next year
Anything you withdraw is added back to your contribution room on January 1 of the following year.
Does not affect income-tested benefits
Withdrawals are not income, so they do not reduce OAS, GIS, the Canada Child Benefit or the GST credit.
Room accumulates from 2009
If you were 18 and resident in Canada in 2009 and have never contributed, you have well over $100,000 of room.
Holds real investments
A TFSA is not a savings account. It can hold funds, segregated funds, GICs and more — the name is misleading.
Questions we get asked
The CRA sets a new dollar limit each year, and your personal room is that plus every unused year since 2009 or since you turned 18, plus any amounts you have withdrawn. Your exact room is in your CRA My Account.
That is the most common TFSA mistake. Withdrawn room only returns on January 1 of the following year. Re-contributing sooner can create an over-contribution penalty of one percent per month.
Yes, and most people should. They are separate contribution limits and they solve different problems.
Naming your spouse as successor holder lets the account transfer to them intact, keeping its tax-free status. Naming them only as beneficiary is less advantageous. This is worth getting right.
Get a tfsa quote
Tell us a little about who needs covering. We will compare the market and come back with two or three options worth considering, with the trade-offs spelled out.
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- Most quotes returned the same business day