Tax Free Savings Accounts

Depending on your tax situation now and in retirement, Tax Free Savings Accounts may be a better savings vehicle for you than RRSPs.  They're a terrific tool for both long-term and short-term investing and allow you to save for virtually any purpose without paying taxes on the interest you earn or capital gains.

Unlike RRSPs, the amount you can invest is not geared to your income; everyone is eligible to invest the same amount, and you don't pay tax on any TFSA funds you withdraw either.

If you're a Canadian resident, 18 years of age or older, with a valid Social Insurance Number, you are eligible to open a TFSA.  There is no maximum age requirement, and you may have multiple TFSAs.



  • Use the money in your TFSA for any reason.


  • You can withdraw at any time (Subject to investment restrictions) and withdrawals increase your contribution limit the following year.  Unused  contribution room can be carried forward to use in future years.

Tax Efficiency

  • Your TFSA grows tax-free and withdrawals are tax-free.

Contributions & Withdrawals

Making Contributions

In 2020, you are able to contribute $6,000 annually into your TFSA, with unused contribution room carried forward. Contributions are not tax deductible. Unused contribution room is carried forward indefinitely.

More information on TFSA limits are available on the Canada Revenue Agency website.

Making Withdrawals

You can withdraw at any time, and these withdrawals are not subject to withholding tax, nor are they reported as taxable income. When money is withdrawn from a TFSA, the contribution room is not lost. Funds taken from a TFSA are added back to the unused contribution room the following year. Withdrawals made during hte current year should not be re-contributed to a TFSA until the following year to avoid an over-contribution.


Other Points to Know

Your annual Notice of Assessment will document and notify you of your allowable contribution room.

You are responsible for ensuring that your contribution room has not been exceeded.  Should you over contribute, you will be subject to a 1% tax per month on the over contributed amount until it's withdrawn.

Want to learn more?
Visit the Government of Canada's TFSA website. For current rates, click here.