Tax-Free Savings Account (TFSA)

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Grow your savings without paying taxes on investment income and use it whenever you see fit without any tax consequences.

  • What is a TFSA?

  • How it works

  • Advantages

A TFSA allows taxpayers who are age 18 or more and who have a Social Insurance Number (SIN) to put money aside in eligible investment vehicles and watch those savings grow tax-free throughout their lifetime. Taxpayers can use their TFSA savings for a variety of needs, such as to purchase a car, renovate a house or take a family vacation, without paying taxes on interest income.

Each year, you can transfer funds to a TFSA, up to a maximum amount  of your unused contribution room, regardless of your earned income. TFSA contributions are not deductible for income tax purposes. TFSA returns (interest, dividends or capital gains) and withdrawals are tax-free.

What's more, the amounts you withdraw from your TFSA in a given calendar year actually increase your contribution room for the following calendar year. You can therefore re-contribute all or a portion of the amounts you withdrew from your TFSA, beginning in the year after your withdrawal. Unused TFSA contribution room is carried forward and accumulates in future years.

Important: Your annual contributions should not exceed your TFSA contribution limit. If they do, you will have to pay tax on the excess amount, which you will have to withdraw from your TFSA.

  • If you are receiving federal income-tested benefits, or if you are eligible to receive federal income-tested credits, your eligibility to receive these benefits or credits is not affected by TFSA income or withdrawals.
  • Upon death, the accumulated TSFA balance can usually be transferred tax-free.
  • It is not necessary to set up a TFSA or file a tax return to earn contribution room.
  • When you contribute to your spouse's TFSA, even if he or she has no income, your contribution room is not affected.

What's the difference between a TFSA and an RRSP?

TFSA/RRSP comparison
  TFSA RRSP
Objective Savings for short- and medium-term projects Retirement savings
Contribution age limit None Age 71
Annual contribution limit $5,500 18% of earned income, up to $21,000, less the pension adjustment
Contributions are deductible on your income tax return No Yes
Withdrawals are taxable No Yes

 

Guaranteed investment certificates (GIC)

Benefit from competitive returns with fixed- or variable-rate GICs.

Investment accounts

Take advantage of the returns from a market index, mutual investment funds or a portfolio of mutual investment funds.

High-interest savings account (La Capitale Stow & Grow TFSA Account)

Benefit from a high interest rate and pay no service charges.

Investment funds

Diversify your portfolio with our comprehensive line of mutual funds and segregated funds.

For more information about how the TFSA works and the rules governing accounts of this type, go to the Canada Revenue Agency's website.

Refer to the service and transaction fee information

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Get advice on insurance, savings and investments

Talk to an advisor

1 855 896-9495

8:30 a.m. to 5:00 p.m. weekdays

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