Tax-Free Savings Account

A new tax-smart way to save for your familys future

With the new Tax-Free Savings Account (TFSA), you will be able to contribute up to $5,500 annually and earn tax-free investment income.
Tax-Free Savings Accounts 

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

Annual contributions of $5,500 (indexed to inflation)

Any unused contribution room can be used in future years

No upper age restriction on contributions unlike an Registered Retirement Savings Plan (RSP)

Make withdrawals any time for any purpose (e.g. car purchases, vacations, home renovations)

Previous years 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 spouses or common-law partners TFSA subject to available contribution room

What are the considerations?

Unlike an RSP, 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 review the TFSA Fact Sheet or visit the Canada Revenue Agency website.