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Tax Free Savings Account (TFSA)

Tax-Free Savings Account (TFSA), introduced by the Federal Government in 2009, allows you to save and invest money without having to pay tax on any of the interest it earns. Withdrawals from your account are also tax-free. 

How the TFSA works

  • Contribution to a TFSA will not be deductible for income tax purposes but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn.
  • Unused TFSA contribution room can be carried forward to future years.
  • The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.
  • Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.
  • Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death.

What are the benefits? 

  • Those who cannot contribute $5,000 from 2009 through 2012 will be able to carry forward their unused contribution room to future years, $5,500 from 2013 through 2014, $10,000 for 2015, $5,500 from 2016 through 2018, $6,000 for 2019 to 2022 and $6,500 for 2023.
  • If you withdraw for the TFSA the full amount of the withdrawals can be put back into the TFSA in the future. 
  • Canadians can contribute to their spouse’s or common-law partner’s TFSA, depending on the spouse’s or partner’s available room. 
  • The TFSA will also provide seniors with a tax-free savings vehicle to meet ongoing savings needs, something they have only limited access to once they reach age 71 and are required to begin drawing down their registered retirement savings. 
  • There will be no impact on income-tested benefits. Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits, such as the Guaranteed Income Supplement and Canada Child Tax Benefit. 

Maximum Contribution Room Calculation 

  • When you contribute less than the maximum contribution limit, the difference is referred to as "unused contribution room" and is calculated as follows:
    • Unused contribution room from the prior year, PLUS
    • Contribution limit for the current year, PLUS
    • Withdrawals in the previous year


Brayden was eager to open his TFSA, but he didn’t turn 18 until December 21, 2021. On January 4, 2022, he opened a TFSA and contributed $12,000 ($6,000 for 2021 plus $6,000 for 2022 – the maximum TFSA dollar limits for those years). On the advice of his broker, he had opened a self-directed TFSA and invested in stocks that increased in value. By the end of 2022, the value in Brayden’s TFSA had increased to $12,800. Brayden was worried that for 2023, he would only be able to contribute $5,700 (the TFSA dollar limit of $6,500 for 2023 less the $800 increase in value in his TFSA through 2022). Neither the earnings produced in the account nor the increase in its value will reduce the TFSA contribution room in the following years, so Brayden can contribute up to $6,500 in 2023 to his TFSA.

How is a TFSA different from a Registered Retirement Savings Plan? 

  • Contributions to an RRSP are deductible and reduce your income for tax purposes. In contrast, your TFSA savings will not be deductible. 
  • Withdrawals from an RRSP are added to your income and taxed at current rates. Your TFSA withdrawals and growth within your account will not – they will be tax-free.

Meet your local planning expert

We can help you understand RRSPs, show you the different investment options available, explain the short and long term benefits, and help prepare an RRSP plan that makes sense for your future.

Tony Young, CFP®

Director, Advice and Service
Aviso Financial Inc.
240 Water Street
St. John’s NL A1C 1B7
(709) 758-8258

Tina Skinner, PFP®

Wealth Management Advisor
Aviso Financial Inc.
38 Main Street
Corner Brook NL A2H 1C3
 (709) 634-5341
 (709) 632-0363

Greg Murray, CFP®

Wealth Management Advisor
Aviso Financial Inc.
51 Commonwealth Avenue
Mount Pearl NL A1N 1W7
 (709) 747-9415
 (709) 690-4990

Peter Bishop

Wealth Management Advisor
Aviso Financial Inc.
1 Pinsent Drive
Grand Falls-Windsor NL A2A 2S8
(709) 489-9051

Donna McGrath, CFP®

Wealth Management Advisor
Aviso Financial Inc.

341 Freshwater Road
St. John’s NL A1C 1B7
 (709) 754-2312

Suellen Jenkins

Wealth Management Advisor
Aviso Financial Inc.

6 Roe Avenue
Gander NL A1V 1W5
 (709) 256-3537

See our latest TFSA rates

List of rates for Tax Free Savings Account (TFSA)*
Tax Free Savings Account (TFSA)* Rate
Daily Interest Savings Account
6 Month Fixed Term
1 Year Fixed Term
2 Year Fixed Term
3 Year Fixed Term
4 Year Fixed Term
5 Year Fixed Term
7 Year Fixed Term

*Rates subject to change. Terms and conditions may apply.

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