​Tax-Free Savings Account (TFSA)

A practical addition to your client's savings portfolio

The tax-free savings account (TFSA) is a registered savings plan for retirement or any other project like a trip, a new car, renovations or a down payment on a house.

Who can contribute to a TFSA?

Canadians aged 18 and over can contribute to a TFSA, whether they receive a salary or not.

Advantages of an TFSA for your clients

  • The returns on investment in a TFSA are tax-free.
  • The amount of unused contribution room may be carried over to subsequent years.
  • Withdrawals are not taxable, whether before or after retirement.
  • Withdrawals may be made at any time. Redemption fees may apply.

How does the TFSA work?

  • The maximum contribution amount to a TFSA is $6,000 per person since 2019. Your clients may also use the Canada Revenue Agency's Tax Information Phone Service to find out their TFSA contribution ceiling.
  • Your client may not deduct his TFSA contributions in his income tax return.
  • The amounts withdrawn from the TFSA are added to the maximum annual contribution amount.

TFSA Performance

The Canadian Governement's Tax-free savings account website explains the TFSA in more detail.

You can use their calculator to evaluate the performance of your client's TFSA.

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