What is a TFSA (Tax Free Savings Account)?

A TFSA is a type of investment account that encourages Canadians who’re 18 or older (with a valid social insurance number) to save money and earn interest tax-free. Ideal as a short-term savings strategy, TFSAs are more flexible than other savings programs because they allow you to withdraw money from the account when you need it and repay it when you’re able to. The best part is, the contributions you make and any income that you earn in the account (from say, interest or dividends) are exempt from tax even when you withdraw them.

Note: The amounts you contribute to your TFSA and any related administrative costs can’t be deducted on your tax return.