Short for Tax-Free Savings Account — a registered Canadian account where investment growth and withdrawals are never taxed, regardless of how much the investments inside have grown.
Normally, the government taxes investment gains. A TFSA is a special account type that removes that tax entirely — whatever grows inside it, and whatever you eventually take out of it, is yours, tax-free, forever. It's not a specific investment itself; it's a tax-sheltered wrapper you can hold stocks, ETFs, or cash inside.
You can only put in a limited amount each year (your "contribution room"), which accumulates starting the year you turn 18. Withdraw money, and that contribution room comes back — but not until the following calendar year, which is the detail that trips people up most often.
Related Terms
🇨🇦 Check exactly how much room you have.
Try the TFSA Room Calculator →