Investments / TFSA
TFSA: Grow Your Savings Tax-Free for Life
A Tax-Free Savings Account lets your money grow without tax and lets you take it out at any time, for any reason, without paying tax. We help you choose the right investments inside your TFSA so it works harder than a regular savings account.
Many Canadians use their TFSA like a bank account and earn very little. A TFSA can hold GICs, segregated funds and high-interest savings, and every dollar of growth is yours to keep. Used well, it is one of the most powerful savings tools in Canada.
TFSA at a glance (2026)
- $7,0002026 annual contribution limit
- $109,000Total room for someone who has been eligible since 2009 and never contributed
- Age 18+Canadian residents with a valid SIN can open one
- $0 taxon interest, dividends, capital gains and withdrawals
- Next yearAmounts you withdraw are added back to your room on January 1
- 1% a monthPenalty on any amount over your limit
Figures for 2026. Check your exact room in CRA My Account, as the CRA does not track same-year withdrawals in real time.
How a TFSA works
Contribute
Deposit up to your available room each year, in one amount or monthly.
Invest
Choose investments that match your goal, from safe GICs to growth funds.
Grow tax-free
Interest, dividends and gains are never taxed while in the account.
Withdraw any time
Take money out tax-free and get the room back the following year.
TFSA or RRSP?
Both accounts help you save, but they work in opposite ways. Here is a simple comparison:
TFSA
- No tax deduction when you contribute
- Withdrawals are tax-free
- Use it for any goal, short or long term
- Withdrawals do not affect OAS or GIS
- No age limit to keep contributing
RRSP
- Contributions reduce your taxes now
- Withdrawals are taxed as income
- Best for retirement savings
- Must convert to a RRIF by age 71
- Higher limit for higher earners
If you expect to be in a lower tax bracket in retirement, an RRSP often comes first. If not, or if you need flexibility, the TFSA usually wins. Read more about the RRSP.
Ways to use your TFSA
Emergency fund
Keep a safety cushion that earns more than a chequing account and is easy to reach.
Home, car or travel
Save for short-term goals without any tax when you spend the money.
Retirement income
Withdrawals don’t count as income, so they won’t reduce your OAS or GIS.
Estate planning
Name your spouse as successor holder so the account passes to them tax-free.
Learn more →Frequently asked questions
Can I have more than one TFSA?
Yes, but your total contributions across all TFSAs cannot be more than your available room.
What happens if I withdraw and re-contribute in the same year?
If you have no unused room left, putting money back in the same year can cause an over-contribution. The room from a withdrawal only comes back on January 1 of the next year.
Is a TFSA only a savings account?
No. It can also hold GICs, segregated funds and other qualified investments. The right mix depends on when you need the money.
What happens to my TFSA when I die?
If you name your spouse or common-law partner as successor holder, the account simply passes to them, tax-free. Other beneficiaries receive the value tax-free up to the date of death.
Talk to Devendra Kumar, Financial Planner (CLU, CHS)
DK Insurance & Investment Inc. serves families across the GTA from offices in Vaughan, Mississauga and Brampton. Call or text +1-647-761-0517 for a free, no-obligation conversation.