TFSA — Tax-Free Savings Account (Canada)
The TFSA (Tax-Free Savings Account) is a Canadian registered investment account introduced in 2009. Gains earned in a TFSA (interest, dividends, capital gains) are entirely tax-free, and withdrawals are not taxed.
TFSA Key features
- 2026 limit: $7,500 (unused room carries forward indefinitely)
- Lifetime accumulated cap (born 1991+): approximately $102,000 in 2026
- Eligibility: Canadian resident, age 18+ with SIN
- No tax on gains inside, nor on withdrawals
- Flexible withdrawals: reinstated as room the following calendar year
- No tax deduction on contributions (unlike RRSP)
TFSA limits by year since 2009
- 2009-2012: $5,000/year
- 2013-2014: $5,500/year
- 2015: $10,000 (Harper government policy)
- 2016-2018: $5,500/year
- 2019-2022: $6,000/year
- 2023: $6,500
- 2024-2025: $7,000/year
- 2026: $7,500
Eligible TFSA investments
TFSA can hold: Canadian and foreign stocks, ETFs (XEQT, VFV, etc.), bonds, GICs, mutual funds, listed REITs. Not eligible: direct real estate, personal debt.
Over-contribution penalty
The CRA applies a 1% per month penalty on any excess until withdrawn. Check your exact limit in CRA My Account before contributing.
Frequently Asked Questions
Is TFSA really tax-free?
Yes, 100%. No tax on interest, dividends, capital gains — neither inside nor on withdrawal.
Can I have multiple TFSA accounts?
Yes, at multiple institutions. But total limit remains one (cumulative across all your TFSAs).
What's the lifetime TFSA cap?
For a person born in 1991 or before: approximately $102,000 in 2026 (sum of annual limits).
TFSA vs RRSP: which to choose?
TFSA if low/medium income (<$55,000). RRSP if high income (useful deduction). Many use both.
🌐 Version française: /glossaire/celi/