The term TFSA stands for “Tax-Free Savings Account”

Created by the Federal government in 2009, TFSAs can contain different types of investments including: cash, GICs, mutual funds, and segregated funds. Similar to an RRSP, money grown inside the account tax-free

The Benefits

No Tax on Earnings – Any income earned (interest, capital gains and/or dividends) inside the TFSA is yours tax-free.

Tax-Free Withdrawals – You can withdraw the money whenever you like and won’t be taxed. Any withdrawals done in a year will be added to your contribution room the following year.

Carry-Forward Unused Room – Any unused contribution room can be used in future years.

No Impact on Income Tested-Benefits – Withdrawals from TFSAs don’t impact your eligibility for Old Age Security (OAS), Guaranteed Income Supplement (GIS), or the Canada Child Tax Benefit (CCTB).


TFSAs are versatile investment plans. They’re suitable for those saving for the short to medium term – say for things like buying your first home, a car or even a dream vacation. They’re also good to use as a “rainy day fund” to cover emergency expenses or can be used in addition to an RRSP to accumulate money for retirement.

Already retired? TFSAs are also great savings vehicles for those who are no longer able to use RRSPs since there is no age limit on contributions.

They are not suitable if you intend to make regular withdrawals and re-deposit funds frequently the way you would with your chequeing account. You may not be able to keep records about the frequent transactions and you may over-contribute which will trigger a penalty by CRA.

To setup a TFSA, you must be over the age of 18 and have a valid Social Insurance Number (SIN).


Track your TFSA contribution limit through “My Account” with CRA. For information on how to register for “My Account”, click here.