A TFSA (Tax-Free Savings Account) is a Canadian government-registered account that allows you to save and invest money tax-free—for any purpose, not just retirement.
| Feature | Details |
|---|---|
| Purpose | Save/invest money tax-free for any goal (short or long-term). |
| Contributions | Not tax-deductible (unlike RRSP). |
| Growth | All income (interest, dividends, capital gains) is tax-free. |
| Withdrawals | Completely tax-free and can be re-contributed. |
| Age Requirement | Must be 18+ and have a valid SIN. |
| Annual Limit (2025) | $7,000 (as of 2024 and expected same in 2025). |
| Lifetime Limit (2025) | $95,000, assuming eligible since 2009. |
If you contribute $7,000 and invest it in Segregated funds, and it grows to $10,000:
| Feature | TFSA | RRSP |
|---|---|---|
| Contributions | Not tax-deductible | Tax-deductible |
| Withdrawals | Tax-free | Taxed as income |
| Growth | Tax-free | Tax-deferred |
| Re-contribution | Allowed in future years | Not allowed (unless HBP/LLP) |
| Best for | All-purpose savings, low/mod income | Retirement, high income |
Contact a licensed Life Insurance Advisor to learn more and open your TFSA account.
