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Tax-Free Savings Account (TFSA)

Tax Free Savings Accounts

A smart, tax-efficient way to save for just about anything

What is a TFSA?

A TFSA is a federally registered savings program open to Canadian residents over the age of 18 with a valid SIN number. The program was developed in 2009 as a way to help people save and grow their money on a tax-free basis.

Unlike RRSPs, contributions to a TFSA are not tax deductible; meaning, contributions don’t reduce your taxable income the way that RRSP contributions do. However, the contributions to your TFSA are tax sheltered, and any income generated in your TFSA grows on a tax-free basis. Additionally, any withdrawals you make from your TFSA are tax free.

What can I use my TFSA for?

You can use your TFSA for anything. It’s one of the most tax-effective ways for Canadians to save, but also one of the most flexible.

Use your TFSA to save for short, medium, or long-term goals. It’s a great way to save for retirement, for a vacation or a major purchase, for your RRSP contributions, or an emergency fund – the possibilities are endless. The underlying benefit, of course, is that income earned on your TFSA investments is not taxed, and you can withdraw your funds when you need to.

Benefits of a TFSA

Tax free growth

You won’t pay tax on any interest, dividends, or capital gains that your investments earn inside your TFSA.

A variety of investment options

Build your TFSA using a variety of investment and savings options – including GICs, mutual funds, and more.

Flexible contributions and withdrawals

Carry forward unused contribution room and make tax-free withdrawals when you need to.

TFSA contribution and withdrawal rules

TFSA contribution limits

For 2024, the annual contribution limit is $7,000. Your total contribution limit, or your “contribution room” is the maximum amount that you can contribute to your TFSA. You can find this information by creating an online account with the Canada Revenue Agency (CRA).

Important: The contribution limit is per person, and not per account. You can have as many TFSA accounts as you like, but your total contributions can’t exceed the limit.

Who can contribute to a TFSA?

Anyone who is a Canadian resident over the age of 18 with a Social Insurance Number (SIN) can contribute to a TFSA. You don’t need to be earning employment income as you would if you wanted to contribute to an RRSP.

If you’re over 18 and you’ve never contributed to a TFSA, you can carry forward any unused contribution room, going back to 2009. 

What about unused TFSA contribution room?

Unused contribution room can be carried forward from previous years. If you’ve never contributed to a TFSA and you were over 18 in 2009, you have $95,000 in unused contribution room.

For the cumulative total for all years since 2009 visit the Canada Revenue Agency TFSA page.

TFSA withdrawal rules

You can take money out of your TFSA any time for any reason. When you make withdrawals, you will not be taxed on any of the income earned on your investments. If you make a withdrawal, however, you can’t contribute that amount back the same year. In January of the following year, the amount withdrawn will be added back to your contribution room.

Types of saving and investing options for your TFSA

Like an RRSP, a TFSA itself isn’t an investment. It’s more of an umbrella account, under which you can hold different types of investments. You can build your TFSA with a variety of investing products, such as GICs, mutual funds, ETFs, stocks and more.

Guaranteed investment certificates

A risk-free way to grow your money. A Guaranteed Investment Certificate (GIC) keeps your principal investment safe and comes with a guaranteed rate of return. Choose from a variety of low-risk investments to build a balanced portfolio.

Explore GICs
High interest savings account

A high interest savings account (or HISA) is a risk-free place to hold funds within your TFSA. In some ways, it functions like a regular savings account that pays you interest on your balance. You can move TFSA savings to a GIC or other types of investments at any time.

Explore the HISA
Three generations; a father, his son, and his grandson out for a hike
Mutual funds

A mutual fund is a collection of investments like stocks, bonds, and other funds. It lets you pool your money together with other investors, making it easier for you to own a more diverse array of investments.

Explore mutual funds
Frequently asked questions

Questions? There are several ways to get in touch

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds, other securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated.