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A Tax-Free Savings Account (TFSA) is a flexible investment account that can help you meet both your short- and long-term goals.

Investment income in a TFSA—whether you’re earning interest, dividends or capital gains—are not taxed, even when withdrawn. This tax-free compound growth means that your money grows more quickly inside a TFSA than in a taxable account (see chart for more details).


At-a-Glance: Tax-Free Savings Account

You are on: Contributions

The annual contribution limit is $5,500. This limit will rise along with inflation in future years, in $500 increments.

In addition, you can carry forward unused contribution room indefinitely. Previous contribution limits were $10,000 for 2015, $5,500 for 2013 and 2014, and $5,000 for the years 2009 to 2012.

You are on: Eligibility

Any Canadian resident age 18 or older with a Social Insurance Number can open a Tax-Free Savings Account.

Note: The age of majority is 19 for residents of Newfoundland and Labrador, New Brunswick, Nova Scotia, British Columbia, Northwest Territories, Yukon and Nunavut, which may delay the opening of a TFSA. However, the accumulation of contribution room will start at age 18.

You are on: Income Requirements

You are not required to have earned income to contribute to a Tax-Free Savings Account.

You are on: Tax Benefits

There is no tax deduction for contributing to a TFSA. However, the returns your investments generate (interest, dividends or capital gains) are not taxable (except for any foreign tax on foreign investments).

In addition, your withdrawals are tax-free.

You are on: Withdrawals

You can withdraw money from your account at any time, (depending on what you invested in). At RBC®, we will not charge you a TFSA withdrawal fee.

In addition, you can re-contribute the amounts you withdrew anytime after the year of withdrawal.

For example:
Jan 2015: You contribute $10,000
July 2015: You withdraw $2,000

2016 TFSA allowable contribution = $7,500
($5,500 annual allowable for 2016 + $2,000 re-contribution. This assumes that you have maximized your annual allowable contribution for all previous years)

You are on: Investment Options

You can invest in RBC Savings Deposits, RBC GICs and RBC Funds through RBC Royal Bank. You can always make regular automatic contributions with an RBC TFSA-Matic®.

You can also invest in stocks and bonds through RBC Direct Investing® and RBC Dominion Securities.


Tax-Free Savings can add up faster

The chart below shows how $5,000 contributed annually, earning 6% interest per year can grow within a TFSA vs. outside of a TFSA.


See How much Faster your Savings Can Grow. Try the TFSA calculator to see how fast your investment grows within a TFSA versus a taxable account. Get Started.

Information about the Tax-Free Savings Account is based on what is currently available from the Canadian government and can be subject to change.


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