A Tax-Free Savings Account (TFSA) is a registered account that allows Canadians to earn investment income and capital gains tax-free. It can be used to save for any purpose—short-term or long-term—and withdrawals are not taxed.
Despite the name, a TFSA is not just a savings account. It can hold a wide range of investment products, depending on how you open and use it.
To open a TFSA, you must:
You can open a TFSA at most banks, credit unions, or online brokerages.
You can hold many types of assets, including:
The account grows tax-free, and you won’t pay taxes on withdrawals—even on investment gains.
Each year, the federal government sets a contribution limit. You also accumulate unused room if you don’t contribute the full amount in previous years.
2025 TFSA contribution limit: $7,000
Total lifetime limit (2009–2025): $95,000, if you’ve been eligible since the beginning and never contributed.
Over-contributing can result in a 1% monthly penalty, so it’s important to track your limit through your CRA account.
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