A TFSA (Tax-Free Savings Account) is a powerful savings tool available to Canadians that allows your money to grow tax-free, not just tax-deferred.

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Here’s what you need to know:

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How It Works:
   •    You contribute money to your TFSA.
   •    You can invest that money (e.g., in stocks, ETFs, mutual funds, GICs).
   •    Any growth—interest, dividends, or capital gains—is tax-free.
   •    Withdrawals are also tax-free, and you can use the money for anything (home, vacation, emergencies, etc.).

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Key Features:
   •    Annual contribution limit (for 2025: $7,000)
   •    Total lifetime room adds up if you were 18 or older since 2009
   •    Unused room carries forward
   •    Withdrawals don’t affect government benefits (like OAS or GIS)
   •    You can re-contribute what you withdrew—but only in the following calendar year

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TFSA vs RRSP:
   •    TFSA: No tax deduction on contributions, but no tax when withdrawing
   •    RRSP: Contributions are tax-deductible, but taxed when you take money out

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Great for:
   •    Emergency fund
   •    Saving for a car, wedding, or vacation
   •    Long-term investing
   •    Supplementing retirement savings