Quick Facts

Tax-Free Savings Account

Introduced in the 2008 federal budget for implementation January 1, 2009

A new savings plan whereby contributions are not deductible for income tax purposes, however, income earned within the plan is tax-free.

Contribution Limits

Beginning in 2009, individuals, 18 or older were able to contribute up to a maximum of $5,000 per year. Subsequent to 2009, contribution limits were to be indexed to inflation subject to an adjustment to the nearest $500.  The 2015 limit was raised significantly to $10,000 but was decreased to $5,500 for 2016 by the change in government. The limit increases to $6,000 for 2019. Unused contribution limits carry forward indefinitely. Normal income attribution rules do not apply thus allowing a higher income spouse to establish a TFSA in the name of the lower income spouse. Interest on money borrowed to contribute is not tax deductible.


You may withdraw funds at any time without tax or penalty. This includes any income earned in the plan since inception. Additionally, unlike an RRSP, you may re-contribute the amount withdrawn in a future year including the income earned.

Qualifying Investments

Qualifying investments are similar to RRSP’s; including cash, deposit accounts, mutual funds, bonds, and publically traded securities. You may also own shares in privately held corporations subject to restrictions.

Excess Contributions

Similar to RRSP’s, excess contributions are subject to a tax of 1% per month while the funds are in the plan.

Planning Opportunities

TFSA’s are flexible plans which allow you both short term and long term planning opportunities.

Further Information

Please visit CRA's web page here.