How a TFSA Works

Contributions

  • Canadians 18 and older (based on the Provincial age of majority) can contribute up to $5,000 per year
  • Contributions are not deductible for income tax purposes, but investment income, including interest and dividend income and capital gains earned are not taxed, even if withdrawn
  • Unused contribution amounts can be carried forward to future years

Withdrawals

  • Full liquidity, meaning, you can withdraw any amount at any time*
  • If desired, you can then put that money back into your TFSA without reducing your contribution room for that year

Other Information

  • Assets can be transferred to a spouse upon death
  • Federal income-tested benefits and credits are not affected by the income earned or withdrawals