TFSA Basics
What is a TFSA
The TFSA program began in 2009. It is a way for individuals who are 18 years of age or older and who have a valid social insurance number (SIN) to set money aside tax-free throughout their lifetime.
Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn.
Administrative or other fees in relation to a TFSA and any interest on money borrowed to contribute to a TFSA are not tax-deductible.
Types of TFSAs
There are three types of TFSAs that can be offered: a deposit, an annuity contract, and an arrangement in trust.
Banks, insurance companies, credit unions, and trust companies can all issue TFSAs.
For more information about a certain type of TFSA, contact a TFSA issuer.
Who can open a TFSA
Any individual that is a resident of Canada who has a valid SIN and who is 18 years of age or older is eligible to open a TFSA.
Any individual that is a non-resident of Canada who has a valid SIN and who is 18 years of age or older is also eligible to open a TFSA. However, any contributions made while a non-resident will be subject to a 1% tax for each month the contribution stays in the account. For more information, see “Non-residents of Canada”.
You cannot open a TFSA or contribute to one until you turn 18. However, when you turn 18, you will be able to contribute up to the full TFSA dollar limit for that year.