TFSA basics

Regardless of what you are saving for, a Tax-Free Savings Account (TFSA) is a great way to save for any financial goal – a long-term goal such as retirement or a short-term goal such as a car or a vacation.

TFSAs allow Canadians to save up to $6,000 per year on a tax-exempt basis. They can hold many different types of investments, including all Fidelity Funds.

Any Canadian resident with a social insurance number who has reached the age of majority in his or her province can open a TFSA.*

See the difference a TFSA can make in five, ten, 15 and 20 years.

TFSA - graph comparing accumulation of  TFSA vs non registered account
Assumptions: Rate of return of 6%, marginal tax rate of 50% for interest and 25% for capital gains, distributions reinvested, distribution yield of 2.0%, distribution composed of 50% interest and 50% capital gain, initial contribution of $6,000 and contributions increase in $500 increments based on a 2% inflation rate. Contributions were made at the beginning of the period. Unrealized capital gains were taxed at the end of the holding period. This assumption ignores contributions from prior years.


  • No taxes payable on investment income and growth, even at withdrawal.

  • Contribution limit of $6,000 per year, with unused room carried forward to future years.**

  • Can hold a wide variety of investments, including all Fidelity mutual funds.

  • Withdrawals are not included as taxable income, and will not trigger government benefit clawbacks or affect tax credits.

  • Withdrawals can be recontributed in future years.

TFSA contribution room limit by year from 2009 to 2020*

The following chart shows the contribution limits for each year that the TFSA has been available.

Year Contribution limit **
2009 $5,000
2010 $5,000
2011 $5,000
2012 $5,000
2013 $5,500
2014 $5,500
2015 $10,000
2016 $5,500
2017 $5,500
2018 $5,500
2019 $6,000
2020 $6,000



Contributions Not tax-deductible. Tax-deductible.
Withdrawals Tax-free – Withdrawals are added to contribution room effective the following year. Taxed – Withdrawals are final and are not added to contribution room.
Earned income requirement for contribution room Contribution room is not based on earned income. Contribution room is based on earned income up to an annual maximum.
Age requirement for conversion/collapse There are no conversion requirements for TFSAs. An RRSP must be converted to a Registered Retirement Income Fund (RRIF) or annuity at age 71.
Attribution rules Attribution rules do not apply. Money may be given to a spouse to contribute to the spouse’s own TFSA. Attribution rules may apply to withdrawals from a spousal RRSP under certain conditions.
Eligible investments Mutual funds, stocks, bonds and many other investments are currently permitted in RRSPs.



* In British Columbia, Newfoundland and Labrador, Nova Scotia and New Brunswick the age of majority is 19, and a TFSA may not be opened until then. However, you will accumulate contribution room from the time you are 18.
** TFSA contribution limits are determined by indexing $6,000 to inflation for each year after 2009 and rounding the result to the nearest $500. As of January 1, 2019, the TFSA contribution limit is $6,000. 
From 2016 to 2018, the contribution limit was$5,500. The contribution limit for 2015 was $10,000.  The contribution limit for 2013 and 2014 was $5,500. From 2009 to 2012, the contribution limit was $5,000.

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This site is for persons in Canada only. Mutual funds and ETFs sponsored by Fidelity Investments Canada ULC are only qualified for sale in the provinces and territories of Canada.


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