Deposit Services

Tax Free Savings Account

What is a Tax-Free Savings Account?

A tax-free savings account is a registered product with the Government of Canada that allows you to save or invest money without paying tax on the income it earns, and you also can withdraw it tax-free.


The Tax-Free savings account was created in 2009 and it provides many investment opportunities.

What are the qualifications for opening a tax-free savings account?

To be eligible to open a Tax-Free Savings account, you must:

  • be an individual (not a Trust or a Corporation);
  • be a resident of Canada, with a valid SIN;
  • be 18 years of age or older.

How much money can I contribute to my TFSA?

When the TFSA program started in 2009 the contribution limit was $5000 per year. However, because contribution limits are indexed to inflation and rounded to the nearest $500, in 2013 the contribution limit was changed to $5500 moving forward.

What happens if I decide not to contribute?

One of the major benefits of the TFSA is that unused contribution room is carried forward indefinitely. This means that if you did not open up a TFSA in 2009, you are still eligible to use your unused contribution limits from the years that your TFSA was not registered.

What happens to my contribution limits when I withdraw from my TFSA?

When you withdrawal funds from a TFSA, it will increase the unused contribution room in the year following the withdrawal.

How will I know what my TFSA contribution room is?

When you receive your Notice of Assessment (after filing your taxes) it will include your TFSA activity and allowable contribution room.

What happens if I over-contribute?

As the account holder, you are responsible for ensuring that you have not exceeded your TFSA contribution limit.

Over-contribution amounts are subject to a tax of 1% per month (12% annually) until withdrawn.


What type of products can I invest my TFSA funds in?

TFSA investments include: term deposits, credit union shares, mutual funds, publicly traded securities and bonds.

What are some features of the TFSA?

  • TFSA contributions are not deductible in determining income for tax purposes (unlike RRSP contributions).
  • Any income earned in your TFSA will not be taxed (e.g. interest, dividends, capital gains).
  • Withdrawals of contributions and/or income will not be subject to tax.
  • Withdrawals are not subject to withholding tax, and are not reported as taxable income.
  • Withdrawals will not affect your eligibility for income-related benefits or credits (e.g. Canada Child Tax Benefit, Guaranteed Income Supplement).
  • Interest on money borrowed to purchase or contribute to a TFSA is not deductible for tax purposes.

How will a TFSA benefit me?

You can use your TFSA to save for any goal, to purchase a new car, renovate a home, start a small business or take a family vacation.

Calculate your savings using the Tax-Free Savings Account calculator.

Where can I get more information about TFSA’s?

For more information visit the Government of Canada’s TFSA website.