Save your money and the taxes! A Tax Free Savings Account (TFSA) is a registered general-purpose savings product that allows you to earn tax-free interest income in the account to more easily meet your short-term or lifetime savings needs whether it be to purchase a new car, renovate a house, start a small business or take a family vacation.
A TFSA can make an excellent complement to an RRSP and may be used to maximize retirement income when RRSP contribution limits have been reached.
Starting in 2009, TFSA contribution room accumulates each year in which you are at least 18 years of age (at any time in the year), have a Canadian social insurance number and are a resident of Canada.
Contribution room for each year is as follows: