Who can open a TFSA
You can open a TFSA once you're 18 and a resident of Canada with a social insurance number. Your room starts building in the year you turn 18, whether or not you open an account that year.
How much you can put in
The TFSA limit for 2026 is $7,000. Unused room carries forward with no end date, so if you've never had a TFSA and you've been eligible since 2009, you have $109,000 of room in 2026.
Contributions aren't deductible. You put in money you've already paid tax on, and you don't get a refund for it.
What's tax-free
Interest and anything else you earn inside a TFSA isn't taxed, and neither are withdrawals. That's the main difference from an RRSP, where the deduction comes now and the tax comes when you take money out.
A TFSA isn’t only for savings: it can contain cash, GICs and other qualified investments. The tax rules are the same whatever is inside.
Taking money out
You can withdraw at any time, for any reason, and you don't report it as income.
The amount you take out comes back as new room on January 1 of the next year, not right away. If you put it back in the same year without enough room left, it counts as an over-contribution.
The 1% a month mistake
Putting in more than your room costs 1% of the extra amount for every month it stays in the account. The CRA doesn't always warn you first. The usual cause is a withdrawal put back in the same year.
Read what happens if you over-contribute