TFSA in a nutshell

A Tax-Free Savings Account (TFSA) is a personal savings account that can be used to save for any goal. After-tax money can go into a TFSA, but your investments grow tax-free and you won’t pay any tax on withdrawal.Who should invest in a TFSA?Canadians who have reached the age of majorityGreat for short term, medium-term, and long-term savingsBest suited for low to medium-income earners or as a complement to an RRSPBenefits include:

Earn investment income, tax-free

Interest, capital gains, dividends you earn in the account are not subject to tax

Flexibility to withdraw from TFSA

Withdrawals are tax-free and can be at any time, for any purpose that you choose

Flexible savings plan

Any unused contribution room in TFSA can be carried forwardAny withdrawals from a TFSA in one year, can be recontributed in the next calendar year

Government benefits stay the same

Withdrawing from a TFSA and receiving any amount will not affect the government benefits you get (ex. Child tax benefit, GIS, etc.)

Current contribution limit per year is $6,000 as of 2021 and $75,500 if at least 18 years old in 2009 and never contributed to a TFSA.