Tax-Free Savings Account

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 2023 contribution limit for TFSAs is $6,500.

Key features:

  • Available to all Canadian residents, 18 years and older;
  • 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; your current allowable contribution limit can be found by going to one of the following services:
  • Funds available in your TFSA can be withdrawn tax-free at any time for any purpose. You can recontribute withdrawn amounts in the same year only if you have unused TFSA contribution room.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; and
  • Income earned in a TFSA and withdrawals do not affect your eligibility for federal income-tested benefits and credits


Planning tip:

If you withdraw funds from your TFSA in the year, it is important to wait until the following year to re-contribute this amount to your TFSA.

Click here to download our TFSA reference guide.