TFSA
A Tax Free Savings Account (TFSA) is a registered investment or savings account that allows for tax free gains. The amount of money that can be contributed to a TFSA is limited each year. Contributions are made with after-tax dollars, which means withdrawals and interest earned is tax free! A TFSA is perfect for any savings goal.
TFSAs were first introduced by the Canadian government in 2009. They were designed by the Canada Revenue Agency to function as a registered investment account that can hold mutual funds, ETFs, bonds or cash savings, allowing for income-tax free gains.
A Tax Free Savings Account is a great way to save for any financial goal - a long term goal such as retirement or a short-term goal such as a vehicle or vacation. TFSA's are also great for an emergency fund.
2025 Contribution Limit: $7,000
Accumulated Contribution Limit (since 2009): $102,000
YEAR |
ANNUAL LIMIT |
CUMULATIVE LIMIT |
|---|---|---|
2009 |
$5,000 |
$5,000 |
2010 |
$5,000 |
$10,000 |
2011 |
$5,000 |
$15,000 |
2012 |
$5,000 |
$20,000 |
2013 |
$5,500 |
$25,500 |
2014 |
$5,500 |
$31,000 |
2015 |
$10,000 |
$41,000 |
2016 |
$5,500 |
$46,500 |
2017 |
$5,500 |
$52,000 |
2018 |
$5,500 |
$57,500 |
2019 |
$6,000 |
$63,500 |
2020 |
$6,000 |
$69,500 |
2021 |
$6,000 |
$75,500 |
2022 |
$6,000 |
$81,500 |
2023 |
$6,500 |
$88,000 |
2024 |
$7,000 |
$95,000 |
2025 |
$7,000 |
$102,000 |
TFSA - 6 Key Facts
- Your TFSA will have contribution limits set each year by the Canadian Government, regardless of income.
- Unused TFSA contribution room is carried forward indefinitely to future years. If you didn't contribute the maximum amount in a given year, you're allowed to catch up, as long as you stay within the overall cumulative limit.
- At any point, if you contribute more than the total allowed contribution limit, the over-contribution amount will be subject to a tax penalty.
- You can withdraw from your TFSA at any time and for any reason, with no tax consequences.
- Any withdrawals from your TFSA are added to your TFSA contribution limit in the following year, so you are able to recontribute the amount you withdrew.
- You can have more than one TFSA, but be careful that your combined limits stay within your overall contribution limits. You can check your TFSA contribution limits by going to the CRA website and logging into 'My Account'.
To find out your available TFSA contribution room:
Visit the Canada Revenue Agency (CRA) online or download their Mobile App.
