How it works
Contributions are not tax-deductible, but all growth inside the account and all withdrawals are tax-free. When you withdraw, that amount is added back to your contribution room the following calendar year, so the room is not lost.
Contribution room
TFSA room begins to accumulate from age 18, or from the year you become a Canadian resident, and unused room carries forward. The government sets an annual contribution limit each year, which is added to any room you have not used.
Common uses
Because withdrawals are flexible and tax-free, a TFSA is used for emergency funds, short and long-term goals, and as a complement to an RRSP.
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Book my free review →Frequently asked questions
Are TFSA withdrawals taxed?
No. Growth inside a TFSA and withdrawals from it are tax-free.
When does TFSA contribution room start?
From age 18, or from the year you become a Canadian resident. Unused room carries forward.
Can I re-contribute money I withdraw?
Yes. A withdrawn amount is added back to your contribution room the following calendar year.
Is there an income requirement for a TFSA?
No. TFSA room does not depend on earned income.
Related pages
This page is for general educational purposes only and does not constitute personalized financial, tax, legal or accounting advice. Figures, limits and coverage ranges are illustrative and change over time - verify current terms before acting. Insurance and registered-account eligibility is subject to underwriting and government rules. Compensation is disclosed in writing before any application is signed. Neelesh Kumar is a Licensed Life & Health Insurance Agent regulated by FSRA - verify at fsrao.ca. © 2026 Wealthready · FinanceWithNeelesh · Kitchener, Ontario.