A TFSA (Tax Free Savings Account) allows you to set money aside in eligible investments and watch those savings grow tax-free throughout your lifetime. Interest, dividends, and capital gains earned in a TFSA are tax-free for life….even when you withdraw them. The “catch” is that there is a maximum amount you are allowed to put in a TFSA- most people have $102,000 of TFSA contribution room. That said, folks who maximize their TFSA usually have a balance of more than $102,000 since it’s permitted to grow just like any other investment account should.
Where can I open a TFSA?
TFSAs can be opened at investment brokerages (like Bowie Financial Inc), banks, trust companies, insurance companies, and credit unions in Canada. It’s important to work with a company that understands how to maximize this unique account (like someone who understands taxation).
How do I invest using a TFSA?
A TFSA is like a vehicle for your money. It can hold all sorts of investments and you can have more than one TFSA as long as you follow the rules, so good advice is key. Many Retirees choose Segregated Funds because they offer a 100% Beneficiary Guarantee to protect their money from a market shortfall; while allowing it to continue to grow in the market. There are also GICs, Stocks, Mutual Funds (the Seg. Fund’s riskier cousin), Savings accounts, Bonds, ETFs, and more.
Is there a maximum I can contribute to my TFSA?
As of 2025, if you’ve been a Canadian resident and at least 18 years old since 2009 (when the Tax-Free Savings Account was introduced), your total cumulative TFSA contribution limit is $102,500.
The TFSA contribution room grows each year, and any unused room carries forward — so if you haven’t contributed in previous years, that space is still available to you.
Here’s a breakdown of the annual TFSA contribution limits:
2009–2012: $5,000 each year
2013–2014: $5,500 each year
2015: $10,000
2016–2018: $5,500 each year
2019–2022: $6,000 each year
2023: $6,500
2024 & 2025: $7,000 each year
➡️ Total by 2025: $102,500
It’s important to note that while your TFSA can grow through investment gains, your contribution limit is based only on the deposits you make, not on account growth.
For example, someone who contributed $95,000 over the years could now have a TFSA valued well over $130,000 thanks to investment returns — and that growth is 100% tax-free.
Every year that new contribution room becomes available (like the additional $7,000 added in 2025), you can continue to top up your TFSA to take full advantage of the tax-free savings and investment opportunity. And don’t forget that any unused TFSA contribution room rolls over from one year into the following year.
What happens to my TFSA when I die?
If you’re married, your spouse can take over your TFSA room and it can continue to grow tax free in your spouse’s name. Also, TFSAs can be paid out quickly and tax-free to your beneficiaries. In most cases, you can name beneficiaries on your account and that money would even bypass Probate/Ontario’s Estate Administration Tax. They are a great way to save long term for an Estate!
When I take money out of my invested TFSA that’s made money, I really don’t have to pay taxes?
Nope, you really don’t have to pay taxes! All gains in your TFSA are truly tax-free – just make sure you follow the rules…or find an Advisor that will keep you in line 🙂
