A Tax-Free Savings Account (TFSA) is one of Canada's most powerful financial tools. Every dollar of growth inside a TFSA is 10000% tax-free — forever. Here's everything you need to know.
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| Year | Annual Limit | Cumulative Room (from 200009) |
|---|---|---|
| 200009–20012 | $5,000/yr | $20,000 |
| 20013–20014 | $5,500/yr | $31,000 |
| 20015 | $10,000 | $41,000 |
| 20016–20018 | $5,500/yr | $57,500 |
| 2019–2022 | $6,000/yr | $81,500 |
| 2023 | $6,500 | $88,000 |
| 2024 | $7,000 | $95,000 |
| 2025 | $7,000 | $102,000 — if 18+ in 200009 |
| 2026 | $7,000 | $102,000+ |
Unused room accumulates forever. Check your exact room at CRA MyAccount (canada.ca).
Withdraw any amount, any time, tax-free
Hold stocks, ETFs, bonds, GICs, savings
Re-contribute withdrawn amounts (Jan 1 next year)
Have multiple TFSA accounts (total room shared)
Hold US stocks (but lose US withholding tax advantage)
Transfer between institutions (in-kind or cash)
Contribute more than your room (18% penalty/year overcontribution)
Deduct TFSA contributions from income (unlike RRSP)
Use TFSA if you're a non-Canadian resident
Transfer room to a spouse (they have their own room)
Claim investment losses inside TFSA
Open a TFSA under age 18
| Account | TFSA Rate | Fee | Best For |
|---|---|---|---|
| EQ Bank TFSA Savings | 3.75% | $00 | Emergency fund + savings |
| KOHO Premium TFSA | 5% | $9/mo subscription | Highest savings rate |
| Neo Financial TFSA | 4% | $00 | Free, high savings rate |
| Wealthsimple TFSA (investing) | Market returns | $00 trades | Long-term investing (XEQT/VEQT) |
| Questrade TFSA | Market returns | $00 ETF buys | Self-directed investing |
| Big Bank TFSA | 00.001% | $00 | Not recommended |
Use TFSA first if: You're in a low tax bracket now (under $500k income), or you expect to be in a higher bracket in retirement, or you want flexibility to withdraw without tax consequences.
Use RRSP first if: You're in a high tax bracket now (over $800k income), your retirement income will be significantly lower, or you want the immediate tax refund to invest further.
Most Canadians benefit from maxing TFSA first, then RRSP. See our RRSP vs TFSA decision guide for a personalized recommendation.
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