Tax-Free Savings Account (TFSA)

A Tax-Free Savings Account (TFSA) is a type of savings account that is available to residents of Canada. The account is designed to help Canadians save money by allowing them to earn tax-free investment income on their contributions.

Contributions made to a TFSA are not tax-deductible, but any earnings, including interest, dividends, and capital gains, are tax-free. The TFSA has an annual contribution limit, which is set by the government, and any unused contribution room can be carried forward to future years.

Unlike other savings accounts, the TFSA can be used to hold a variety of investments, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs).