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About TFSAs

A Tax-Free Savings Account. The Flexible Way To Save

A Tax-Free Savings Account (TFSA) is an effective way to grow your savings, as the money you contribute is not tax-deductible upfront or taxed if you have to withdraw it. With a TFSA you can park your money tax-free in the short term or save it over the long term to complement your RRSP.

The Basics

Tax-Free Savings

Earnings from TFSA contributions are not taxed while in your TFSA accountn or when you withdraw the funds.

Contribution Limit

From 2009 to 2012, you could contribute $5,000 to a TFSA each year.

It was then indexed to $5,500 for 2013 and 2014, then increased to $10,000 in 2015 and back to $5,500 from 2016 to 2018.

For 2019, the contribution limit has increased to $6,000. The cumulative TFSA contribution limit comes to $63,500.

The limit will be indexed to inflation and rounded to the nearest $500 using the Consumer Price Index. If you don’t use your full contribution amount in a given year, you can carry it forward indefinitely

Withdrawing & Re-contributing

Any funds withdrawn allow a comparable amount to be contributed the next year. In other words, if you cash out $2,000 this year, next year’s contribution limit will increase by $2,000. Whatever you withdraw can be put back in at a later time


TFSAs, RRSPs and RESPs are all great ways to save and while they share some features, they are actually quite different. The following chart compares the key rules and regulations of each account.

Rules & Regulations


Maximum Age Requirement: No
Minimum Age Requirement: 18
Annual Contributions: $6,000
Contributions Tax-deductible: No
Withdrawals Tax-free: Yes
Carry Forward Unused Contribution Room: Yes
Contribution Limit Based on Earned Income: No


Maximum Age Requirement: 71
Minimum Age Requirement: No
Annual Contributions: Yes
Contributions Tax-deductible: Yes
Withdrawals Tax-free: No
Carry Forward Unused Contribution Room: Yes
Contribution Limit Based on Earned Income: Yes


Maximum Age Requirement: Yes
Minimum Age Requirement: No
Annual Contributions: No
Contributions Tax-deductible: No
Withdrawals Tax-free: No
Carry Forward Unused Contribution Room: Yes
Contribution Limit Based on Earned Income: No


Five questions and answers about TFSAs

1. Can I have TFSA accounts at different financial institutions?

Yes, although all accounts are still subject to the single combined annual contribution limit – currently $6,000

2. What if I contribute more than my TFSA annual limit?

If, at any time, you contribute an amount above your annual limit, you’ll be charged a tax of 1% per month on that excess amount until it’s withdrawn or until your TFSA contribution room for the following year resets.

3. Can I hold foreign investments in my TFSA?

You can certainly contribute foreign funds to a TFSA – the issuer will simply convert the funds to Canadian dollars using the applicable exchange rate on the date of the transaction. The total amount of your contribution (in Canadian dollars) cannot exceed your TFSA contribution room. If dividend income from a foreign country is paid to a TFSA, the dividend income could be subject to foreign withholding tax.

4. Can I share my TFSA with my spouse?

You can’t share an account but you may contribute to your spouse or common-law partner’s TFSA, subject to his or her available contribution room.

5. What happens to my TFSA when I die?

If you name your spouse or common-law partner as the successor account holder, your TFSA funds can be easily transferred and continue to grow tax-free. If you don’t appoint a successor account holder, additional steps are required.

Did You Know? 

Your savings grow much faster in a TFSA

Investing $5,500 a year for 20 years at 6% interest could grow to $214,460 in a TFSA but only $159,113 in a regular non-registered savings account.That’s a difference of over $55,347.

(assumes $100,000 annual income and Ontario tax rate)

Average amount Canadians
held in their TFSAs in 2016.

More than 40%of Canadians
contribute to TFSAs.


Download VERSION AS A PDF BROCHURE FROM ia private wealth INC.

The information presented on this page was prepared by iA Private Wealth Inc. and is only meant to be used for educational purposes. It is also available for download in PDF brochure format from iA Private Wealth Inc. by clicking the download link above.
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