What’s a TFSA?

The Government of Canada introduced the Tax Free Savings Account (TFSA) in 2009 to provide Canadians with a personal savings vehicle. It allows an individual to contribute $5,000 every year that they are eligible and withdraw funds tax-free at any time and for any purpose. Any unused TFSA contribution room carries forward to the next year. The contributions made to a TFSA are after tax dollars and any investment returns are tax-free.

Who is eligible? You are eligible to open a TFSA account if you:

  • Are a Canadian resident
  • Have a valid Social Insurance Number (SIN)
  • Are 18 years of age or older


In addition to the benefits of tax-free savings illustrated below, the TFSA also has several other benefits:

  • Individuals can contribute to their spouse’s TFSA without being subject to income attribution rules
  • Contribution limits are not determined by income
  • Income earned in the TFSA will not affect an individual’s eligibility for federal income-tested benefits and credits such as the Canada Child Tax Benefit, Old Age Security (OAS) or Guaranteed Income Supplement (GIS)

The primary benefit of a TFSA is the tax savings

An individual contributing $200 a month for 20 years to their TFSA will gain $11,045 in tax savings compared to a taxable unregistered account.

Notes: Combined federal and provincial tax savings based on a $200 monthly contribution for 20 years and a 5.5% rate of return. For unregistered savings, a 21% average tax rate on investment income is assumed (based on 40% interest, 30% dividends and 30% capital gains, and a middle-income earning account holder.

Source: The Tax-Free Savings Account –

Contact a 3i Financial Group Advisor today to develop a plan that ensures you take advantage of the tax-saving strategies of a TFSA.