What is a Tax-Free Savings Account (TFSA)?
TFSAs were created to help Canadians save and grow their money outside their RRSPs while earning tax-free investment income.
How Does a TFSA work?
- Any Canadian resident 18 years or older can hold a TFSA.
- Each year you can contribute up to a specified amount into your TFSA.
- Your money grows tax-free – when you withdraw funds you pay no tax, and you pay no tax on interest earned.
- If you didn’t maximize contributions in any given year, the unused contribution room accumulates and can be used in future years.
- You can withdraw funds without penalty and re-contribute to catch up in later years (recontributing in the same year may result in an over-contribution amount which would be subject to a penalty tax).
- Income earned in, or funds withdrawn from, a TFSA do not affect eligibility for certain benefits and credits such as Old Age Security or the Canada Child Benefit.
- TFSAs are flexible – you can invest in term deposits, GICs, mutual funds* or just leave it in a savings account. And, you can save for anything – a new car, a vacation, a home renovation or just a rainy day.
Contribution Amounts
YEAR |
CONTRIBUTION LIMIT |
|---|---|
2024 |
$7,000 |
2023 |
$6,500 |
2022 |
$6,000 |
2021 |
$6,000 |
2020 |
$6,000 |
2019 |
$6,000 |
2018 |
$5,500 |
2017 |
$5,500 |
2016 |
$5,500 |
2015 |
$10,000 |
2013/2014 |
$5,500 |
2009-2012 |
$5,000 |
FHSA vs. RRSP vs. TFSA
Understanding the difference between Registered Savings Accounts is an important step towards securing your financial future. These acronyms may seem intimidating, but fear not; we’re here to simplify them for you.
Libro offers many investment options to help your TFSA contributions grow tax-free. Even better, we help you create strategies to find balance between RRSP contributions, RESP contributions, TFSA contributions and contributing to your need for new shoes, a new truck or the odd night out for dinner from time to time.
*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds and other securities are not insured nor guaranteed, their values change frequently and past performance may not be repeated.