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TFSAs: Tackling your most frequently asked questions

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Tax-free savings accounts (TFSAs) were designed to help Canadians save, for both short-term goals such as renovating your home and long-term goals such as retirement and estate planning.  

To help with any questions you may have about TFSAs, we’ve compiled a handy list of FAQs.

Jump to:

TFSA basics

Contributing to your TFSA

Investments in a TFSA

Withdrawing from your TFSA

Some finer points about TFSAs

TFSA basics

1. What is a TFSA?

A tax-free savings account (TFSA) is a type of registered account created by the federal government in 2009. “Registered” means that the government allows earnings in the account to grow tax-free. Even though “savings account” is part of the name, it shouldn’t be confused with a bank account.

2. Who can contribute to a TFSA?

You have to be a Canadian resident, at least 18 years old and have a social insurance number. Unlike a registered retirement savings plan (RRSP), you don’t need to earn an income to contribute, and you can contribute until any age.

3. How do I open a TFSA?

A financial advisor can help you open an account. Contact an MD Advisor* if you would like to set up a TFSA.

4. How does a TFSA work?

Unlike with an RRSP, when you contribute to your TFSA you can’t deduct the amount from your income on your tax return. But all investment growth (capital gains, interest, dividends) inside the TFSA remains tax-free.

Contributing to your TFSA

5. How much can I put in a TFSA?

The annual contribution limit for 2023 is $6,500. As a resident of Canada, your “contribution room” has been accumulating since 2009 (for every year that you were 18 or older). If you have never contributed, as of 2023 you can put in $88,000.

Here’s a breakdown of TFSA contribution limits since its inception:


TFSA annual contribution limit

TFSA cumulative contribution limit















































6. What is the deadline for TFSA contributions?

There is no deadline for a TFSA contribution. You just get more TFSA contribution room every year.

7. Where can I find out how much contribution room I have?

You can confirm your contribution room by contacting the Canada Revenue Agency (CRA). You can find it online if you are registered for CRA’s “My Account” services. For more information, see “Where can I find my TFSA contribution room information?” at

8. What happens if I over-contribute?

CRA assesses penalties for over-contributions at a rate of 1% per month on the excess contribution.

9. Do investment gains in my TFSA affect my contribution room?

Investment income and changes in the value of your TFSA investments do not affect contribution room.

Investments in a TFSA

10. What investments can I hold in a TFSA?

Just like with an RRSP, many types of investments are eligible for TFSAs. These include stocks, bonds, mutual funds, exchange-traded funds, cash and guaranteed investment certificates.

11. Are there investments that I should not hold in my TFSA?

Dividend income from foreign investments (such as dividends from a U.S. stock) is generally subject to foreign withholding tax, so from a tax perspective it’s best to hold such investments in a non-registered account.

Withdrawing from your TFSA

12. What happens when I withdraw from my TFSA?

TFSA withdrawals are tax-free, and you can use the money for any purpose. A nice feature is that amounts you withdraw from your TFSA can be simply replaced in a future year. The amount you withdrew will be added to your contribution room — but not until the following calendar year. You can replace the funds in the same year, but only if you have the available contribution room.

Some finer points about TFSAs

13. Can I have more than one TFSA?

You can have more than one TFSA, but you don’t get more contribution room. The total you can contribute between them is limited to your accumulated contribution room.

14. Can I open a joint TFSA with my spouse?

No, a TFSA can only be held by one person.

15. Can I make a contribution to someone else’s TFSA?

No, you can’t contribute directly to someone else’s TFSA, and that includes your spouse or children. You can, however, provide another person with money so they can contribute to their own TFSA.

16. What happens if I have a capital loss in my TFSA? Can I use that to reduce my taxes?

In many cases, investors can sell assets that decrease in value (capital loss) to lower the capital gains of other investments and, in turn, minimize capital gains tax. However, you can’t carry this out in a TFSA because you don’t pay tax on any capital gains. The opposite is true in a non-registered account, where your capital loss can be applied to help offset your capital gains. Note also that in a TFSA, a capital loss is not considered a withdrawal, so it is not part of your contribution room calculation.

17. When I die, will my TFSA be taxed?

If you have named your spouse or common-law partner as “successor holder” on your TFSA, usually this person simply replaces you as the account holder and acquires all rights related to your TFSA. If you name your spouse as the beneficiary without the successor holder designation — or if you name any other person or the estate as the beneficiary — the TFSA earnings from your date of death to when the estate is settled could be taxable.

18. What if I move to another country?

If you already have a TFSA, you can maintain it but you can’t add any funds to it once you’ve left Canada and, for tax purposes, have become a non-resident.

Your MD Advisor can answer any other questions you have and propose strategies to help you get the most out of your TFSA.

* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.