Tax-Free Savings Account

Everything you need to know about TFSAs

What is a TFSA?

The TFSA was introduced by the Canadian government in 2009 to help Canadians accumulate wealth by investing and saving on taxes. Canadian residents who are 18 and older with a valid Social Insurance Number (SIN) can easily set up an account.

What are the tax-benefits of a TFSA?

  • Tax-free earnings: A TFSA allows you to earn capital gains and dividends tax-free, with some exceptions
  • Tax-free withdrawals: While your contributions are not tax-deductible, you won’t be taxed or penalized for any eligible gains when you withdraw funds.
  • Won’t affect government benefits: In retirement, money you withdraw from a TFSA won’t count as yearly income. So, if you’re receiving government programs (Child Tax Benefit, Guaranteed Income Supplement, etc.), your TFSA won’t alter the amount you receive from the program.

What to know about TFSA contributions

  • Your contribution room begins when you turn 18, and any unused room is carried forward indefinitely until you use it.
  • Here are the TFSA contribution limits for each year since 2009:
2009$5,000
2010$5,000
2011$5,000
2012$5,000
2013$5,500
2014$5,500
2015$10,000
2016$5,500
2017$5,500
2018$5,500
2019$6,000
2020$6,000
Cumulative$69,500

What to know about TFSA withdrawals

  • With a few exceptions, withdrawals from TFSAs are tax-free and can be made at any time.
  • You can also re-contribute the amount you withdrew in the next calendar year.
  • For example, if your TFSA was maxed out in and you withdraw $2,000 in 2017, in 2018, you will be able to deposit the $2,000 back to your TFSA along with the newly added yearly contribution room of $5,500 for 2018, for a total of $7,500. Yearly added TFSA contribution varies from year to year.

Investments you can hold in a TFSA

While some think a TFSA is simply a savings account, TFSA are an incredibly versatile investment account. You can build and diversify a portfolio by investing in TFSA-eligible investment products:

  • Stocks (both Canadian and international)
  • ETFs
  • Options
  • Mutual funds
  • Bonds
  • Gold and silver bars
  • GICs
  • Cash

For a full list of eligible investments, visit the CRA

Benefits of a Questrade TFSA

  • No annual account fee. No opening or closing fees.
  • Hold both Canadian and U.S. dollars in the account at the same time.
  • Open a TFSA in minutes.
  • Contribute to your TFSA quickly and easily online.

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Get answers to our frequently asked questions

Is my TFSA locked where it is?

No, it’s your money. You can move your TFSA anywhere you want.

Can I have multiple TFSAs?

You can have as many TFSA accounts as you wish, but your total contributions cannot exceed your total contribution limit.

What happens if I accidentally over contribute to my TFSA?

If you over-contribute to your TFSA, you'll face a penalty of 1% per month on the excess contribution.

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