Tax-free savings accounts (TFSAs) are among the most popular retirement- and savings-focused vehicles in Canada. Because you contribute after-tax dollars, any interest, dividends or capital gains earned inside a TFSA grow tax-free and withdrawals are also tax-free. However, the federal government sets annual limits and cumulative contribution limits for each eligible individual; this allowance is called your contribution room.
Use our contribution room calculator to determine your current TFSA contribution room:
What is a TFSA?
A TFSA is a flexible savings or investment account that shelters income from tax. You can hold a variety of qualified investments, including cash, guaranteed investment certificates (GICs), mutual funds, exchange-traded funds (ETFs), bonds and individual stocks. The rules for TFSAs are set by the government, while banks, credit unions, insurance companies and brokerages administer individual accounts.
There are three common TFSA structures:
- Deposit TFSA: A savings account or GIC held with a bank or credit union into which you make deposits.
- Annuity contract: An arrangement with an insurance provider where a lump-sum payment buys guaranteed periodic payments for a set term.
- Arrangement in trust: A trust-style account where a financial institution holds mutual funds or securities on your behalf.
Although these account types differ in how investments are held or paid out, they all share the core benefit: contributions are made with after-tax dollars, so withdrawals are not taxed.
featuredTFSA GIC rate (1 year)Earn a guaranteed 3.50% in your TFSA when you lock in for 1 year.go to site
Best online brokersOpen your TFSA with one of the top online brokers in Canada.Read now
MoneySense is an award-winning personal finance magazine serving Canadians since 1999. Our editorial team of journalists collaborates with leading financial experts to test and compare products from major banks, credit unions and brokers. We aim to present clear, reliable information to help you choose the best accounts and investments for your needs.
How much can you contribute to a TFSA each year?
Contribution room is the annual and cumulative limit set by the Canada Revenue Agency (CRA). Any Canadian resident aged 18 or older with a valid Social Insurance Number is eligible to open a TFSA and accumulate contribution room.
Investment growth inside the account does not reduce your contribution room. The limit applies only to contributions you make from outside funds.
How TFSA contribution room works
Your contribution room is unique to you and can change each year. It depends on when you first became a resident eligible for a TFSA, how much you’ve contributed and whether you’ve made withdrawals. If you have multiple TFSAs, the contribution limit applies across all accounts combined.
For example, if you were already a Canadian resident before 2010 and were born in 1975, your cumulative contribution room through 2025 would be $102,000 if you had never contributed. If you had contributed $50,000 over previous years and never withdrawn funds, your remaining room would be $52,000.
If you’ve contributed the maximum every eligible year since turning 18, your remaining annual room may be limited to the current year’s allowance—for 2025 that annual amount is $7,000.
Rankings
Compare the best TFSA rates in Canada
TFSA contribution limits by year
Below are the annual TFSA contribution limits since the program began in 2009, along with cumulative totals. Annual limits are adjusted for inflation and rounded to the nearest $500 when applicable. The limit was increased temporarily in 2015 to $10,000 and returned to $5,500 in 2016.
| Year | TFSA annual limit | TFSA cumulative limit |
|---|---|---|
| 2009 | $5,000 | $5,000 |
| 2010 | $5,000 | $10,000 |
| 2011 | $5,000 | $15,000 |
| 2012 | $5,000 | $20,000 |
| 2013 | $5,500 | $25,500 |
| 2014 | $5,500 | $31,000 |
| 2015 | $10,000 | $41,000 |
| 2016 | $5,500 | $46,500 |
| 2017 | $5,500 | $52,000 |
| 2018 | $5,500 | $57,500 |
| 2019 | $6,000 | $63,500 |
| 2020 | $6,000 | $69,500 |
| 2021 | $6,000 | $75,500 |
| 2022 | $6,000 | $81,500 |
| 2023 | $6,500 | $88,000 |
| 2024 | $7,000 | $95,000 |
| 2025 | $7,000 | $102,000 |
| 2026 | $7,000 | $109,000 |
What happens if you over-contribute to your TFSA?
If you contribute more than your available room, remove the excess as soon as possible. The CRA charges a penalty of 1% per month on the excess amount until it is withdrawn. The CRA will notify you of any over-contribution; if the excess was intentional you could face additional penalties.
When you withdraw the extra funds, you should report the over-contribution on the TFSA return form. In most cases your financial institution will provide the CRA with proof of the withdrawal, so you do not need to call immediately.
Frequently asked questions
To calculate your TFSA room, enter your birth year, the year you became a resident of Canada (if relevant), and any past contributions or withdrawals into a TFSA contribution calculator. That will show your available room for the current year.
If you’ve never contributed, the total you can put in depends on how many years you’ve been eligible. Those who were residents before 2010 have accumulated more lifetime room than those who became eligible later—use the cumulative table above or a calculator to determine your exact amount.
TFSAs do not provide an immediate tax deduction like RRSP contributions do. You also need to track contributions carefully to avoid over-contributing and the associated penalties. Finally, certain types of investment activity inside a TFSA—such as frequent trading that resembles a business—can lead to taxation on income earned inside the account.
If you’ve never contributed before, you may deposit your full accumulated contribution room in a single transaction. Just ensure you do not exceed your available room, since excess contributions are penalized until corrected.
Newsletter
Get free MoneySense financial tips, news & advice in your inbox.
Read more about GICs as an investment:
- How RRSP contribution carry-forward rules work
- When and why to consolidate RRSP accounts
- Benefits and flexibility of family RESPs
- How to ladder your GICs in Canada