What is a TFSA?

Tax- Free Savings Account (TFSA): An account where tax does not apply on contributions, interest earned, dividends or capital gains and withdrawals. Benefits of a TFSA

No Taxes on Investments: No matter how much you invest or earn in your TFSA, you do not have to pay taxes on it

No Taxes on Withdrawals: You can take out the money at any time without paying taxes on it
Variety of Investments: The types of investments in a TFSA can include cash, mutual funds, bonds, stocks, GICs, and ETFs

Things to know about a TFSA Opening a TFSA

Age Requirement: There is a minimum age of at least 18 years or older to open a TFSA, but no maximum age
Only for Canadians: You must be a Canadian resident and have a valid Canadian Social Insurance Number

How TFSA Works The tax-free savings account (TFSA) was first introduced in 2009 with a limit of $5,000 per year. Since then, the account has gone through a number of contribution limit changes, leading to a total contribution limit of $63,500 as of 2019. This means that if you have never opened a TFSA account, you can contribute up to $63,500 today. This contribution room will always be available, with the caveat that you must be at least 18 years old to open an account.

Year	TFSA Contribution Limit	Cumulative Total
2009-2012	$5,000	$20,000
2013-2014	$5,500	$31,000
2015	$10,000	$41,000
2016-2018	$5,500	$57,500
2019	$6,000	$63,500

Any unused contribution room will be carried forward, so you will be able to invest more in the future if needed.

The amount withdrawn from your TFSA can be replaced, as long as it fits within the contribution room

You and your spouse or common-law partner can contribute to each other’s TFSA as long as it is within the contribution limit. Upon death, TFSA assets can be transferred to a spouse tax-free.

There is a 1% penalty per month on the overcontributed amount

The money from the account can be used towards anything

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