Tax-Free Savings Account (TFSA) Essentials
A Tax-Free Savings Account (TFSA) is a savings vehicle that lets you earn tax-free investment income. It is a registered account introduced by the Federal Government in the 2008 Budget. The TFSA allows all of your investment income to grow tax-free and it is a great way to complement your existing registered plans such as the RRSP and RESP.
What are the benefits of TFSAs?
- Tax-free growth - you don’t pay taxes on interest earned in your TFSA which helps you build your savings faster
- Tax-free withdrawals
- You can put back any amounts you withdraw in the year after you withdraw them
- You can choose from a wide range of investment options
TFSA FAQs
Have a question about our TFSA options? We've provided answers to the most common TFSA questions below.
Who is eligible for a TFSA?
All Canadian residents age 18 and older with a Social Insurance Number can open a TFSA.
How much am I allowed to contribute each year?
The 2024 TFSA contribution limit is $7,000, plus the amount of withdrawals you made in 2023 and your unused contribution room from previous years:
- 2009 to 2012: $5,000
- 2013 and 2014: $5,500
- 2015: $10,000
- 2016 to 2018: $5,500
- 2019 to 2022: $6,000
- 2023: $6,500
- 2024: $7,000
If you’ve never contributed to a TFSA and you’ve been eligible since 2009, your unused contribution room for 2024 will be $95,000.
Can I open more than one Tax Free Savings Accounts (TFSA)?
Yes, you are permitted to hold more than one TFSA plan. However, regardless of the number of TFSA plans you hold, you are subject to their total annual contribution limit.
Can I contribute to my spouse or common-law spouse's TFSA?
No. However, you may give money to your spouse to contribute to his or her TFSA.
If I give funds to my spouse to contribute to his or her TFSA, who will get the income, me or my spouse?
Your spouse owns the TFSA and will earn any interest in the account.
How often can I withdraw from my TFSA?
As often as you wish, but timing may depend on what you invested in — for example GICs may not have matured.
If I withdraw money from my TFSA, can I re-contribute this withdrawn amount later on in the tax year?
Withdrawals you make in the current calendar year will be added to your unused contribution room. Amounts can't be re-contributed until the following calendar year or later.
