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Tax-Free Savings Account (TFSA)

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What is a TFSA?

A Tax-Free Savings Account (TFSA) is a registered savings account that lets you grow and withdraw your money tax-free, making it a great option when saving for short and long-term financial goals. The TFSA was introduced by the Government of Canada in 2009 to help Canadian residents that are 18 years or older save money tax-free.

Benefits of TFSAs

  • Tax-free growth and withdrawals

    You pay no tax on qualified investment income that you earn in your TFSA and you can withdraw funds from your TFSA without paying tax.

  • Not just a savings account

    Your TFSA can hold a variety of qualified investments, including cash, stocks, guaranteed investment certificates (GICs) and mutual funds.

  • A flexible way to save

    Withdrawing from your TFSA does not mean permanently losing your contribution room. When you withdraw money from your TFSA, the total amount withdrawn is added back to your contribution room the following year.

  • Comfort and convenience

    A TFSA offers you the flexibility to save for various short-term and long-term goals, usually, with easy access to your money depending on the type of investment you hold.

How does a TFSA work?

  • A TFSA is a flexible account where you can hold qualified investments and earn interest, capital gains, and dividends tax-free.
  • The annual TFSA contribution limit for 2026 is $7,000 and you can carry forward unused contribution room from previous years.
  • You could withdraw from your TFSA anytime tax-free subject to product specifications held within the TFSA, and re-contribute the amount that you withdrew the following year.

Open an account online – it's fast and easy

We offer several TFSA investment options based on your investment goals and risk appetite. See which investment account may be right for you.

  • TD Canada Trust TFSA

    Great for: Investors seeking reliable growth

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  • TD Mutual Funds TFSA

    Great for: Investors comfortable with some risk
    • Gives you access to certain mutual funds offered through TD Investment Services Inc.
    • Benefit from professionally managed mutual fund investments
    • Invest through the TD Multi-Holding Account (MHA) – an all-in-one retail investing account able to hold cash, Mutual Funds & GICs
    • Automatic Investments through Pre-Authorized Purchase Plans offers the option of savings flexibility.
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What is the difference between a TFSA and an RRSP?

The main difference between a TFSA and RRSP is how and when your contributions and withdrawals are taxed. A TFSA offers tax-free withdrawals, while an RRSP provides an upfront tax deduction with taxes deferred until its withdrawn.

TFSA

RRSP
Purpose
Save and invest for any financial goal, short-term or long-term.
Primarily for retirement; can also be used with the Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP).
Eligibility
Canadian residents age 18 or older.
Canadian residents with earned income, up to age 71.
Annual Contribution limit
$7,000 for 2026, plus unused contribution room from previous years.
Up to 18% of previous year’s earned income, to a maximum of $33,810 for 2026 (less pension adjustments plus unused contribution room from previous years).
Contribution room
Carries forward indefinitely.
Carries forward indefinitely.
Tax on contributions
TFSA contributions are not tax-deductible.
RRSP contributions are generally tax-deductible.
Tax on withdrawals
TFSA withdrawals are tax-free in Canada  (Withholding tax may still apply on foreign investments).
RRSP withdrawals are taxed as income at your marginal tax rate, with exceptions for home buyers' plan and lifelong learning plan withdrawals.
Withdrawal rules
Funds can be withdrawn at any time for any purpose subject to product specifications held within the TFSA. Withdrawn amounts are added back to contribution room in the following year.
RRSP withdrawals reduce contribution room permanently; RRSP's must be converted to a RRIF or annuity by age 71.

TFSA Calculator

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Frequently Asked Questions

  • Once you have your TD EasyWeb access set up, you can open a TD Canada Trust TFSA account through TD EasyWeb. You can apply online if you already have a TD Canada Trust chequing or savings account. Once your account is open, you can make regular contributions online.
  • Call us at 1-800-386-3757 if you want advice. Our Investment Specialists are ready to provide investment advice that aligns with your goals.
  • You could also visit a branch near you. We recommend booking an appointment ahead of time.

Every year, the government calculates how much TFSA contribution room you have available. You could log into the Canada Revenue Agency (CRA) website to view your TFSA contribution room in the "My Account" section.

If you withdraw funds from your TFSA, you can re-contribute the amounts you have withdrawn the following calendar year and you could carry forward your contribution room indefinitely.

The annual TFSA contribution limit for 2026 is $7,000 and you can carry forward unused contribution room from previous years.

Your TFSA can hold a variety of qualified investments, including cash (like a savings account), mutual funds, stocks, bonds, and GICs.

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