What is a Tax-Free Savings Account (TFSA)?

The TFSA was established by the Canadian government in 2009 as a “flexible savings vehicle” for Canadians. When you add funds to a TFSA, you are making contributions from income you’ve already paid tax on. Your contributions grow tax-free while they’re in the TFSA account, and you aren’t taxed on any withdrawals. For 2023, you can save up to $6,500 in your TFSA, regardless of your income. The CRA has increased the 2024 TFSA contribution limit to $7,000.