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Self-Directed Tax-Free Savings Account (TFSA)†
A Tax-Free Savings Account (TFSA) lets your savings grow tax-free (with certain exceptions). You’re not taxed on most income you earn within the account, making them a great way to save for short-term needs like a down-payment or vacation and long-term goals like retirement.
With a self-directed TFSA you get to make all the decisions. Choose between a TD Direct Investing TFSA where you can buy and sell a wide range of qualified investments including stocks, bonds, mutual funds, Exchange-Traded Funds (ETFs) and guaranteed investment certificates (GICs), and hold multiple asset types, all within the same account. Or choose a more simplified approach with a TD Easy Trade TFSA which offers investments in stocks and ETFs
Investing with a Tax-Free Savings Account (TFSA)
Canadians use TFSA, because of the flexibility it offers. Learn how you can use this plan to grow your funds tax-free (with certain exceptions), build towards your investing goals, and more.
TFSA contribution limit and timelines for 2026
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$7,000 |
Max contribution limit for tax year 2026 |
|---|---|
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$109,000 |
If you were 18 or older in 2009 and have never contributed to a TFSA, this is the cumulative contribution limit in 2026. |
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Indefinitely |
Any unused contribution room can be carried forward to future years. |
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Recontributions |
Amounts withdrawn in a given year are added to your contribution room in the subsequent calendar year. |
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1% per month |
Penalty for overcontributing to your TFSA |
Comparing TFSA to RRSP
Whether you're saving for retirement, homeownership or education, both RRSPs and TFSAs can be an option.
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TFSA |
RRSP |
|
|---|---|---|
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Primary purpose
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Invest for any goal – short-term or long-term
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Generally, for retirement, but funds can also be borrowed for Home Buyers' Plan (HBP) or Lifelong Learning Plan (LLP)
|
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Annual contribution limit
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$7,0002 PLUS unused contribution room from previous years
|
The RRSP annual contribution limit for 2026 is $33,810 or 18% of previous year’s earned income, whichever is less, (maximum limits apply), minus pension adjustments.3
|
|
Contributions
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Not tax-deductible
|
Generally, tax-deductible
|
|
Unused contribution room
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Carried forward
|
Carried forward
|
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Growth
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Tax-free1
|
Tax-deferred
|
|
Withdrawals
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You’re not taxed on withdrawals.
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Funds that are withdrawn are charged a prescribed withholding tax at the time of withdrawal but will be ultimately taxed as income at your marginal rate. This may affect government benefits such as old age security
|
|
Withdrawn amounts
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Added to contribution room in future years4
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Contribution room is lost for amounts you withdraw
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Got questions? We have answers.
To make a contribution to a TFSA, you will need to open a TFSA account with a bank or financial institution that offers it. Contributions can be made in cash or by transferring investments from other accounts.
You can’t contribute directly to your spouse’s TFSA as you can with a spousal RRSP. However, you can give your spouse money, which they can then contribute to their own TFSA. Any income your spouse earns on the money in their TFSA is theirs and will not be attributed back to you.
Most TFSA holders do not have to pay taxes related to their TFSA investments, and no TFSA tax return needs to be filed.
An individual is permitted to hold more than one TFSA plan. Regardless of the number of TFSA plans held, the individual is subject to their total annual contribution limit.
Please note: A TFSA cannot be registered jointly or as a spousal plan/account.
In an TFSA, you can hold a variety of investments similar to those allowed in other registered accounts. These include eligible:
- Stocks
- Mutual funds
- Exchange-traded funds (ETFs)
- Guaranteed Investment Certificates (GICs)
- Bonds
- Options
In a TFSA, you can hold the same investments to those allowed in other registered TD Easy Trade accounts. These include eligible:
- Stocks
- Exchange-traded funds (ETFs)
If you want to transfer funds from one TFSA to another or from one issuer to another, there will be no tax consequences if your issuer completes a direct transfer on your behalf.
You can withdraw from your TD Direct Investing Tax-Free Savings Account (TFSA) in cash or securities in-kind.
In Cash
You can withdraw cash in any of the following ways:
- Using the Transfer function on WebBroker or TD app
- Call TD Direct Investing at 1-800-465-5463 between 7 a.m. to 10 p.m. ET Monday to Friday.
Securities In-kind
You can withdraw securities in-kind from a TFSA to a non-registered account.
In-kind withdrawals cannot be submitted online through WebBroker. To submit your security in-kind withdrawal request, please log into the TD app and choose Contact Us or contact TD Direct Investing at 1-800-465-5463 to speak to an Investment Representative.
Please note: Any amount withdrawn from your TFSA is added back to your TFSA contribution room at the start of the next calendar year. Re-contribution to a TFSA of any withdrawn amount in the same calendar year on a tax-free basis can only be done if unused TFSA contribution room is available. There is no tax applied to TFSA withdrawals.
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