What is a TFSA?

TFSA stands for Tax-Free Savings Account.  It is a type of registered account in Canada that allows individuals to save and invest money without paying taxes on the income earned or the withdrawals made.  The contributions to a TFSA are made with after-tax dollars, but any income, capital gains, or interest earned within the account are not taxed.  The annual contribution limit for a TFSA is indexed to inflation and may change every year.  The accumulated contribution room is carried forward indefinitely, and withdrawals can be made at any time without penalty.  The TFSA is a flexible and powerful savings and investment tool for Canadians of all ages and income levels.