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Huard & Co

The TFSA

Tax-Free Savings Account

An account where your savings and investments grow tax-free, and you can take money out at any time.

The 2026 numbers

$7,000
New room in 2026
$109,000
Total room since 2009, if you were 18 that year
18
Age your room starts

Numbers checked against the official sources on September 28, 2026.

What it’s for

  • Growing savings for any goal, short or long term: a trip, a down payment, an , retirement.
  • Keeping everything your investments earn: interest, dividends and gains are never taxed, even when you withdraw.
  • Withdrawing at any time, tax-free, and getting that back the next year.

Who it’s for

  • Anyone 18 or older who lives in Canada. Where the age of majority is 19, you open the account at 19, but your room counts from 18.
  • Especially useful on a modest income: no going in, but no tax coming out, and withdrawals don’t reduce or .
  • New to Canada: your room starts in the year you become a resident (that year’s full limit), if you’re 18 or older. Years lived outside Canada give no room.

How it works

  1. Each year Ottawa sets a limit: $7,000 in 2026. Your room builds from the year you turn 18, even without an account, and unused room adds up with no limit.

  2. A TFSA isn’t just a savings account: it can hold investments (GICs, bonds, funds, , stocks). Everything inside is sheltered from tax.

  3. Contributions aren’t deductible: you put in money that was already taxed. In exchange, nothing is taxed after that.

  4. A withdrawal becomes room again on January 1 of the next year. Putting it back the same year without enough room creates an excess, taxed at 1% a month.

An example

Léa, 24, has never opened a TFSA

She turned 18 in 2020 and has always lived in Canada. Her room built up anyway.

Room from 2020 to 2026
$45,500
If she puts in $7,000 this year
$7,000
Value in 20 years, if her investments earn 4.6% a year
$17,300
Tax on the $10,300 of growth
$0

The 4.6% is Huard & Co’s default assumption, based on the 2026 projection guidelines. No return is guaranteed.

Fictional example, round numbers.

Common mistakes

  • Leaving it in cash for years: allowed, but the tax shelter mostly pays off on investments that grow.
  • Re-contributing a withdrawal in the same year without the room: the excess costs 1% a month.
  • Withdrawing the money yourself to switch institutions: ask for a direct transfer, or the new deposit uses up room.
  • Tracking your room from memory: My Account shows it as of January 1.

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General information to help you understand, not personalized advice. Rules change: every number links to its official source.