Understanding TFSAs

Tax-Free Savings Accounts (TFSAs) have been quite successful since their inception in 2009. However, people aren't always fully aware of how they work, so here are some facts:

  • Who can contribute to a TFSA? Any Canadian resident over the age of 18.
  • How much can I contribute? Your contribution room is cumulative. See details.
  • Are my contributions tax deductible? No.
  • Is TFSA income taxable? No.
  • Are my withdrawals taxable? No.

To find out more, go to Comparing TFSAs and RRSPs.

TFSAs are perfect for:

  • saving up for important projects (trips, renovations)
  • covering unexpected expenses (emergency funds)
  • getting tax-free investment income

Important: A 1% monthly tax applies to all contributions exceeding the eligible amount.

Tools and tips

Essential questions about TFSAs

16 questions about TFSAs.

Read tip - Essential questions about TFSAs

Should you invest your savings in an RRSP or in a TFSA?

This depends on what you want to do with your money.

Read tip - Comparing TFSAs and RRSPs