2025 annual limit: $7,000.00
Projected Balance
$272,949.09
Total Contributions
$140,000.00
Tax-Free Growth
$132,949.09
Cumulative Room (since 2009)
$109,000.00
| Year | Contributions | Growth | Balance |
|---|---|---|---|
| 1 | $7,000.00 | $420.00 | $7,420.00 |
| 2 | $14,000.00 | $1,285.20 | $15,285.20 |
| 3 | $21,000.00 | $2,622.31 | $23,622.31 |
| 4 | $28,000.00 | $4,459.65 | $32,459.65 |
| 5 | $35,000.00 | $6,827.23 | $41,827.23 |
| 6 | $42,000.00 | $9,756.86 | $51,756.86 |
| 7 | $49,000.00 | $13,282.28 | $62,282.28 |
| 8 | $56,000.00 | $17,439.21 | $73,439.21 |
| 9 | $63,000.00 | $22,265.56 | $85,265.56 |
| 10 | $70,000.00 | $27,801.50 | $97,801.50 |
| 11 | $77,000.00 | $34,089.59 | $111,089.59 |
| 12 | $84,000.00 | $41,174.96 | $125,174.96 |
| 13 | $91,000.00 | $49,105.46 | $140,105.46 |
| 14 | $98,000.00 | $57,931.79 | $155,931.79 |
| 15 | $105,000.00 | $67,707.70 | $172,707.70 |
| 16 | $112,000.00 | $78,490.16 | $190,490.16 |
| 17 | $119,000.00 | $90,339.57 | $209,339.57 |
| 18 | $126,000.00 | $103,319.94 | $229,319.94 |
| 19 | $133,000.00 | $117,499.14 | $250,499.14 |
| 20 | $140,000.00 | $132,949.09 | $272,949.09 |
What is the 2025 TFSA annual limit?
The 2025 TFSA annual contribution limit is $7,000. This is set by CRA and indexed to inflation. The cumulative lifetime contribution room for someone who has been 18+ and a Canadian resident since 2009 is $109,000. If you have never contributed, you have this full amount available. Check your CRA My Account for your exact room.
What investments can I hold in a TFSA?
A TFSA can hold the same investments as an RRSP: cash, GICs, bonds, mutual funds, ETFs, stocks listed on designated stock exchanges (including US and international), and certain other qualified investments. You cannot hold real estate directly, private company shares (with limited exceptions), or cryptocurrency. The key advantage is all growth is completely tax-free.
How do TFSA withdrawals work?
You can withdraw from your TFSA at any time, for any reason, completely tax-free. The withdrawn amount is added back to your contribution room -- but not until January 1st of the following year. This means if you withdraw $5,000 in March, you cannot re-contribute that $5,000 until next January without over-contributing. There is no penalty for withdrawals and no impact on government benefits like OAS or GIS.
What happens if I over-contribute to my TFSA?
Unlike the RRSP's $2,000 buffer, there is no over-contribution grace amount for TFSAs. CRA charges a 1% per month tax on the highest excess amount in that month. This can add up quickly. Common mistakes include re-contributing in the same year you withdraw, or not accounting for direct transfers between TFSA accounts (which count as a withdrawal and re-contribution).
Can non-residents contribute to a TFSA?
No. You must be a Canadian resident to accumulate TFSA contribution room. If you become a non-resident, you can keep your existing TFSA (and it continues to grow tax-free in Canada), but you cannot make new contributions. Any contributions made while a non-resident are subject to the 1% monthly tax. Room only accumulates for years you are a Canadian resident.
CRA-Aligned: TFSA limits based on 2025 CRA rules. Growth projections are illustrative only and do not guarantee future returns.
How the Tax-Free Savings Account helps you grow your money tax-free
What is a TFSA?
A Tax-Free Savings Account (TFSA) is a registered account where all investment income — interest, dividends, and capital gains — grows completely tax-free. Unlike an RRSP, contributions are not tax-deductible, but withdrawals are completely tax-free and do not affect any government benefits. You can use a TFSA for any purpose, not just retirement.
How much can you contribute?
The annual TFSA contribution limit for 2025 is $7,000. If you were 18 or older in 2009 when TFSAs started and have never contributed, your cumulative lifetime room is $102,000. Unused room carries forward indefinitely. If you withdraw money, that amount is added back to your contribution room on January 1 of the following year.
What can you hold inside a TFSA?
A TFSA can hold the same investments as an RRSP: savings deposits, GICs, bonds, stocks, ETFs, mutual funds, and even certain mortgage-backed securities. You can hold US and international stocks, though foreign dividends (like US dividends) may still be subject to foreign withholding tax because the TFSA does not benefit from the Canada-US tax treaty.
What happens if you over-contribute?
If you contribute more than your available room, the CRA charges a penalty of 1% per month on the excess amount for each month it remains in the account. For example, if you over-contribute by $5,000, you owe $50 per month until you withdraw the excess. Check your contribution room on My CRA Account before making large contributions.
How do withdrawals and re-contributions work?
You can withdraw from your TFSA at any time for any reason, tax-free. If you withdraw $10,000 in 2025, you get $10,000 of new contribution room on January 1, 2026 — in addition to the regular annual room. Important: do not re-contribute in the same year you withdraw, or you may trigger an over-contribution penalty.
Should you use a TFSA or an RRSP?
If your marginal tax rate is low now and expected to be higher later, a TFSA is better because you do not benefit much from the RRSP deduction. If your tax rate is high now and expected to be lower in retirement, an RRSP is better. For low-income seniors, a TFSA is clearly better because RRSP withdrawals can trigger OAS clawback and reduce GIS payments. Ideally, use both.
What happens to a TFSA when you die?
If you name your spouse as the successor holder, the TFSA transfers to them tax-free and the account continues as their own TFSA. If you name a different beneficiary, the TFSA assets are paid to them and the account is closed. Any growth between the date of death and the date of distribution is taxable to the beneficiary. Naming a successor holder is the most tax-efficient approach.
CRA-Aligned: Based on 2025 CRA rates and thresholds. For personal advice, speak to a qualified accountant or tax professional.
Disclaimer: This calculator provides estimates based on current CRA rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant before making financial decisions. Read our terms
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