Tax-Free Savings Account
A smart way to save
A Tax-Free Savings Account (TFSA) is a flexible savings vehicle that allows Canadians to save for short and long term goals while earning tax free investment income and growth. All income and withdrawals from a TFSA are generally tax free. A TFSA should be used in conjunction with your existing savings plans like Registered Retirement Savings Plans (RRSP), Registered Education Savings Plans (RESP), Registered Disability Savings Plans (RDSP) as well as your non-registered savings.
The 2022 contribution limit for TFSAs is $6,000. The 2023 contribution limit for TFSAs is $6,500.
- Available to all Canadian residents, 18 years and older;
- Since the age of majority for residents of Newfoundland and Labrador, New Brunswick, Nova Scotia, British Columbia, Northwest Territories, Yukon and Nunavut is 19 years old, this may delay the opening of a TFSA. However, the accumulation of contribution room will start at age 18.
- Any interest, dividends and capital gains earned in a TFSA are not subject to tax;
- Wide range of investments, including high-interest savings accounts, mutual funds, guaranteed investment certificates, listed securities, or other types of qualified investment products;
- Unused TFSA contribution room is carried forward and accumulates for future years; it is important to keep track of contributions in the year, especially if you hold multiple TFSA accounts at different financial institutions. Important note: CRA tracks information on file based on your latest tax return only.
- Funds available in your TFSA can be withdrawn tax-free at any time for any purpose. You can recontribute withdrawn amounts in the same year only if you have unused TFSA contribution room. Otherwise, you have to wait until the following year;
- Income earned in a TFSA and withdrawals do not affect your eligibility for federal income-tested benefits and credits; and
- Attributions rules do not apply for funds gifted to a spouse for the purpose of the spouse's TFSA contribution.
We encourage you to make the maximum contribution to your TFSA as a tax efficient way to save for the future.
Please contact us should you have any questions or wish to make a contribution.
Click here to download our TFSA reference guide.