Tax-Free Savings Accounts

With a Tax-Free Savings Account (TFSA), your investments grow tax-free and you can make tax-free withdrawals at any time, for any reason.

Who can open a TFSA?

  • Any Canadian resident 18 years or older with a Social Insurance Number.
  • The age of majority is 19 for residents of Newfoundland and Labrador, New Brunswick, Nova Scotia and British Columbia which may delay the opening of a TFSA. However, the accumulation of contribution room will start at age 18.

What are the benefits?

  • Tax-free investment income, including interest, dividends and capital gains
  • Any unused contribution room can be used in future years
  • No upper age restriction on contributions, unlike an Registered Retirement Savings Plan (RRSP)
  • Make withdrawals any time for any purpose (e.g. car purchases, vacations, home renovations)
  • Previous year's withdrawals are added back to your unused contribution room
  • Income earned and withdrawals have no impact on federal income-tested benefits or credits (Guaranteed Income Supplement, Child Tax Benefit, Old Age Security, etc.)
  • Canadians can contribute to their spouse's or common-law partner's TFSA subject to available contribution room

What are the considerations?

  • Unlike an RRSP, contributions are not tax deductible
  • Capital losses within the TFSA cannot be used to offset taxable capital gains outside the TFSA
  • Interest on funds borrowed to fund the TFSA is not tax deductible
  • Penalty tax on excess contributions

What investments are qualified for the TFSA?

  • Cash, mutual funds, guaranteed investment certificates (GICs), publicly traded securities, and government and corporate bonds.

For more information, please contact us or visit the Canada Revenue Agency website.