What is a TFSA? Canadian Tax Free Savings Account Explained.
TFSA Is a Tax-Free Savings account.
It is similar to an American "Roth IRA", but has less limitations.
Investments within a TFSA are not susceptible to capital gains tax.
Unlike Tax-differed accounts like a RRSP, you do not pay tax on withdrawal.
TFSA is a great vehicle for holding investments like:
- Stocks
- Bonds
- ETFs & Index Funds
How much can I contribute to my TFSA?
The limit has ranged from $5,000 -> $5,500 per year.
The limit is cumulative, so if you missed a year you will still have room to deposit.
Check on the Government of Canada Website for full details on your contribution room.
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