TFSA, Explained - Everything You Need To Know About The Tax Free Savings Account For Beginners

The tax free savings account (TFSA) is a registered investment account (that's right, not a savings account) in Canada that let's you invest money and have tax tree gains - and because of that awesome benefit, there's a limit on the amount you can contribute every year. There's a lot to know about the TFSA, and once you do you'll see why it's a great investment account to start out with and take advantage of. By the end of this video, you'll be all set to invest - tax free!
0:00 What is a TFSA?
2:33 Benefits of the TFSA
3:45 The TFSA is an investment account
5:08 How to open a TFSA
6:08 What is the contribution limit?
8:03 Here's an example
8:38 Withdrawing from your TFSA
9:31 Can you lose contribution room?
11:58 Can you have multiple TFSAs?
12:58 How CDIC protects your deposits
Check out the CDIC website for more information about deposit protection and TFSAs - www.cdic.ca/
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Disclaimer - This content is for education and entertainment purposes only. Steph & Den do not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.

[@stephandden]

Do you have any questions about CDIC protection of deposits held in a TFSA? Ask away below!

[@saadfarooqui5649]

Question: Do you get any interest charges when you open a TFSA account? If yes is there a way to completely avoid this, like I don't want to receive interest and I don't want to pay any interest. It is a religious thing so you answer will be very helpful. Thanks

[@jorgeandrade7872]

I have a question, maybe I didn’t understood, if I am at top of my TFSA, but my annual dividends make me go above the limit, what should I do? Should I take out the dividends or should I reinvest it? Thank you 🙏🏻

[@j.frankparnell3087]

@@jorgeandrade7872 The limit is only on what you contribute, not on the total balance of your account. If you contribute your maximum and your investment doubles in value, you are fine. And you can still contribute even more when the next year rolls around.

[@jorgeandrade7872]

@@j.frankparnell3087 great, thank you 🙏🏻

[@luzmarball5392]

Hi, thank you for the video on TFSA accounts. If I want to buy stocks using my TFSA account what is the minimum time I can hold them before selling them? Do I have to be a long time investor if I want to trade using my TFSA account? Thanks again.

[@imagamerful]

It’s a crime that this isn’t taught in high school

[@stephandden]

Seriously!

[@Inhumaneghost]

Absolutely the best explanation of a TFSA ever. Great job, wish it was explained this way to us in school. I'm passing this on too so many people.

[@stephandden]

So glad you liked it - and thank you for passing it on! 😊

[@EElia-bj9tp]

This video presentation on TFSA stands out as one of the finest. As someone new to the topic, it greatly aided in comprehending the entire concept of TFSA

[@abdulabdillahi931]

I like the work that went into this video, especially dividing the video into multi - mini clips. Loved it. Definitely increased the content's quality. Way to go guy!

[@stephandden]

Thanks so much, Abdul! We're glad you liked it 😊

[@PearlOfJoy7]

This video is EVERYTHING. You've answered so many questions! Thank you for sharing!

[@shirazmahdi]

The best video on TFSA ever. Very clear, very detailed and very creative. This is service to humanity !!!

[@stephandden]

Thanks so much! We're so glad you found it helpful 😊

[@otsam1050]

Cool video, I needed this. The whole investment field was quite overwhelming, basic intros like this are helpful 👍🏽

[@stephandden]

So glad it was helpful! 😊

[@darin6630]

Great basic yet through explanation of the what where and how about TFSAs Crystal clear Thank you both

[@mukeshpuri4757]

Perfectooo... thats a Deep and 100% knowledge related to TFSA in one video. Really Awesome ❤

[@tineschrijvers3174]

Excellent video. So clearly explained. First time I saw a video by you & the simplicity of explanation, using simple language to explain terms meanings, showing pictures and speaking clearly & slow enough to catch all the info were the reason I subscribed immediately.

[@stephandden]

Thank you so much - we appreciate it 😊

[@Roawhocnk]

Thank you so much! I glad to have found your channel. You guys explain information so well 👍👍👍👍

[@saadfarooqui5649]

This video is so dope. Finally a proper explanation of TFSA!!

[@stephandden]

🙌🏿🙌🏻 we're glad you liked it!

[@stacy-annmorgan6685]

Thanks for the info on the CDIC. Much help for a quick understanding.

[@stephandden]

Glad you liked it! 😊

[@ronakkumar1934]

Best explanation for TFSA. Keep up the good work :)

[@stephandden]

Thank you! 😊

[@cmair77]

That was very helpful. You guys did a great job explaining, thank you.

[@fatimaouedraogo1820]

Such a great video ! Very informative and everything is very well explained. Thanks for mentioning the benefits that an HISA would have over a TFSA if the money is just sitting there, haven’t thought of that 😅 Keep up the good work! ✨

[@stephandden]

Thanks for watching, Fatima 😊 We appreciate it!

[@user-tl7lo1sq8z]

I am wanting to learn about investing and I happened to come across this video. You guys made it so simple to understand. Thank you!

[@stephandden]

Thank you for watching! 😊

[@kevincharles265]

I look forward to your videos every week! Financial literacy is something i've been intrigued in subconsciously and being from Toronto as well, I'm so happy to have found your channel to educate myself on various financial and credit products that I wouldn't have discovered prior! I also started using EQ bank thanks to your channel's informative video! Keep killing it guys!

[@stephandden]

Thanks so much, Kevin! We appreciate you and are so glad you're here 😊

[@ChengeerLee]

Love it. Super clear. Great production. You both are excellent communicators 🎉 kudos

[@stephandden]

Thanks so much! 😊

[@lucaromano1479]

You guys are incredibly helpful, thank you so much for your videos!

[@APAKOLYPTIK]

Steph & Den, thank you so much for this video!!

[@stephandden]

So glad you liked it! 🙏🏿🙌🏻

[@user-qj6yb8tb9v]

By far the best video on TFSA

[@stephandden]

Thank you so much 😊

[@adalicainicela1515]

Thank you so much guys, best explanation!

[@stephandden]

Thanks for watching! 😊

[@brandonbuss3224]

Excellent video guys, thanks for sharing

[@stephandden]

Thanks Brandon! 😊

[@raymondly3293]

Love everything you guys are doing. Keep up the good work!

[@stephandden]

Thanks so much! 😊

[@labbdogg2929]

Mehn, I usually do not comment on KZbin. But damn, you guys did a great job of explaining how the TFSA works. I had to log in to make this comment. Great job guys appreciate it.

[@stephandden]

Thanks so much! We're glad you liked it, and we really appreciate your comment 😊

[@pattip8110]

Great work guys!!!🙌🏽

[@stephandden]

Thank you! 😊

[@vikulsood9564]

You guys explained best from all. ❤🎉

[@stephandden]

Thank you! 😊

[@HouseofHalal]

I have a question. As mentioned at 2:16 onwards. Is it worth it to put your emergency savings in a high interest savings account if you have to pay tax on it? Does the benefit outweigh the tax you have to pay on the earned interest rates or are you losing money from that? Would love some more details and specifics on that. Thank you !

[@breenguyen5692]

Hi Steph and Den, Great video ! Do you think you can make one on how to understand your quarterly mutual fund statement? What the numbers mean and the various graphs? Thank you !

[@talktameefromthegcrnetwork8989]

Great job guys thanks so much

[@Ioana515]

Steph and Den you are a God sent!!! Bless your hearts! I needed you in my life. I am an independent contractor and have been watching your videos to learn about investing and saving money for retirement wisely. Taxes have been very rough for me in the past 2 years since I started my independent contractor journey. Now that I am learning about all the tax free investing accounts I have a question: which one of the accounts would you recommend for someone like me who wants to pay less taxes,invest and save for a real estate property? Thank you from the bottom of my heart.

[@shelbyborstmayer1639]

Great explanation, thanks!

[@stephandden]

Thanks for watching! 😊

[@magickal02]

What a great video! Thank you! 🌈

[@stephandden]

Glad you enjoyed the video!😊

[@juanito1975]

Thank you. This was very informative.

[@stephandden]

We're glad you found it helpful! 😊

[@misscd7777]

Very new to all of this. Would love a video or explanation on how to invest through your TFSA. Also would you say to have a HYSA first and then TFSA with any extra income left over after pay day? What if you’re not a high earner and can only contribute a bit each month to either of those accounts? Which steps would be best to take ? Also is it hard to transfer funds from current bank to a HYSA ? Thank you for all your information!

[@paramyadav549]

thank you for sharing and teaching.

[@stephandden]

Of course 😊 thank you for watching!

[@thegreensoul7829]

Very informative ❤ Thanks

[@stephandden]

So glad it was helpful! 😊

[@alexanderfernandez9469]

Wonderful content guys, thank you for sharing. I have a question, are crypto investments able to be hold in the TFSA?

[@stephicool]

Very useful I didn't know about the investment loss. Thanks!

[@stephandden]

Glad you picked that up! Thanks for watching 😊

[@alexeliz75]

that tax free *investment* account is so sooooo helpful wow thanks.

[@stephandden]

So glad this was helpful! 😊

[@sunbubblex]

Very useful and high quality video :) Good job!!!

[@stephandden]

Thanks for watching! 😊

[@AshokKumar-HR20]

Great information 👍🏻

[@stephandden]

Thank you! 🙏🏿🙏🏻

[@camilabousquet]

Really informative video! Thank you for creating ❤

[@stephandden]

Thanks, Camila! So glad you liked it 😊

[@stefangabor5985]

Great job!

[@stephandden]

Thank you! 😊

[@pietropaolofrisoni4575]

Thank you for the lovely and informative video. I have a simple question. Let's say that I am an international worker who obtained a Canadian SIN at the age of 25 (and I was not in Canada before). In that case, my total contribution room starts from when I obtained my SIN, not from when I turned 18. Is that so? Thank you so much, all the best

[@marciolobato3331]

That was a great video. I have a question. I'll be moving to Canada late this year. When I open my first TFSA, what will be my first year contribution limit? Would that be the maximum announced by the government for this year or will be able to use those $50,000 accumulated on these 30 something years?

[@HP-zc9cp]

New to your channel, great explanation but can you please explain that when you buy stock so for how long you have to hold it to not pay tax?

[@AlpineDividends]

Great overview! All of my stock investments are in a TFSA so far =)

[@stephandden]

Thank you! That's great 🙌🏿🙌🏻

[@JeffWillProfess]

You guys are awesome. How did you get into all this?

[@j3nny983]

Great video! But by investing inside the tfsa, would there be options in the account to invest inside? Because if I were to take advantage of the interest paid through a savings account and then I take it out and put it in a ttfsa, I would still pay tax to take out all that money, so what would be the benefit opening a ttfsa

[@ashleyedmonds9045]

Ive been contributing direct from my paycheque into 2 different TFSA's (wealthsimple and rbc) but I dont understand how I invest the money once it's in the account. Wealthsimple shows me how the funds will grow overtime with. my risk level but as for my RBC account I just opened it and nothing happens. So how do you invest the funds within the account to grow further?

[@marcbouchard1488]

THANK YOU!

[@Freddyhb1]

Hi, it' my first time watching a video of yours and I actually subscribed because you did a great job! I have on question tho: at minute 10:01, Dan explained that if my account grew from 50,000 to 55,000 and I withdrawal the 55,000, then I will loose room = 55,000, in that same calendar year. However, I also know that "gains" do not take "room". Saying that, in the same scenario, do I loose room of 50,000 or 55,000 knowing that the additional 5,000 are "gains" Please advise.

[@jfrosh9690]

thank you guys so much for explaining this to me like i am 5 years old omg i feel empowered

[@stephandden]

Ha, of course! That's the goal 🙌🏿🙌🏻

[@tdl2920]

thoughts on holding index ETF's like VOO or VTI in the TFSA....is it better to buy the US listed version or the Canadian version?

[@nicoallen6097]

This video is very informative, keep it up Step & Den I would like to know, how can I buy crypto through a TFSA?

[@pierrejackson6865]

Hello! If you open a TFSA account in a bank, are there fees associated?

[@chriscox1535]

I’m curious is a non redeemable gic tfsa 5% 1 year a good investment or not ? I also have a saving deposit tfsa

[@canelita4596]

Hi guys! Can I contribute the full contribution room in the same calendar year if I have not contributed before?

[@dannysmall7914]

Amazing video

[@stephandden]

Thank you! 😊

[@mrs.natashaellwood8634]

Thank you! We are 25 & 30 married with 2 kids and we know NOTHING about investing! 😢 We want to start investing this year.

[@user-wh5tw8of1b]

Great video . just the thing i needed. Question: If we put money in TFSA, will that money becomes itself tax free for that year ? or the tax free applies to any gain we will will get on that money? For example if we put 5000$ in TFSA and gain 500$ and total amount becomes 5500$. Will the whole amount 5500$ is tax free or just 500$ is tax free?

[@ElectiverBFF]

if i make american dividends in my non registered account then move that dividends to my tfsa is that better than having that American dividend stock in my tfsa and taking that 15 percent withholding fee?

[@marion-v6o]

thanks for this video! i'm trying to learn how to make my money work for me :)

[@stephandden]

Woo, glad you found it helpful! 😊

[@nmnsain]

Thanks for the video. I am new resident and moved to Canada in 2023. Do I have the contribution room from the years I was >18 years old but not in Canada?

[@j.drabek]

Hello! Thank you for your amazing videos! :) Question : let say I open and TFSA in one bank because there is a promotion, for 6 months. After six months, the first bank interest becomes low, but there is a second bank that has a new promotion. So I want to move my money from bank A TFSA account to a new bank B TFSA account. You said that if I take out my money, I will have to wait until the next yearly update so that this amount is adjusted in the CRA. Is moving money from one TFSA account to another counting as if I am taking out money from my maximum amount allowed? Is this counting as new money added? Thanks :) keep going, you are doing a great job

[@Tylenol888]

Question, i have non registered account and has high interest savings and has 1.60 percent interest, my question is, does opening tfsa, is there option also that i can save inside the tfsa in a high interest savings just like in my non registered account?

[@caper087]

would I be better off investing US stocks/ETFs with my RRSP or TFSA ?

[@TA-qg2op]

I have a question about capital gain on US securities in TFSA. Are they subject to capital gain tax in Canada?

[@cyrusmobini1321]

Great video. I had a question, I'll try to explain it with a scenario. Person A and B are the same age and let's say at this year they both have never contributed anything and have an accumulated room of 50k. Person A deposits and invests the 50k in January and with some good investment his money has now grown to 60k in October. Person A decides to withdraw all the money (50k initial money + 10k gain). It is now the next year and the government has added another 5k to the limit. person B who has never contributed anything now has an accumulated limit of 55k. But what about person A? Does he now have 65k room? Did that 10k gain increased his contribution room as well? or out of the 60k he withdrawal, only the 50k is added back?

[@gianthills]

Great job. Just wondering how to use this account to buy stocks.

[@barborabratova4346]

What happens to the account if a Canadian moves abroad? Can they still contribute as a citizen but non-resident?

[@edemkofi6428]

if you just became a permanent resident, do you still have your max limit starting from 2009, cumulating it to today or you can only start investing from the year you became a permanent resident?

[@shakilarahman2234]

From you TFSA funds you make an investment in a housing project is it cover y CDIC

[@dagamer1992]

Can a foreign expat apply for TFSA and perhaps RRSP as long as I have permanent residency (I’m also planning to apply for citizenship eventually but til then I want to get it started asap)?

[@mohammedlayes9248]

Are there any types of investments (inside TFSA) that are considered illegal/taxable?

[@memyself4588]

Love the new profile picture!!😊

[@stephandden]

Thank you! Glad you noticed 😊

[@MamaGnesL]

Thanks, im a new subscriber😀 thinking my retirement in few years from now

[@aellmaa]

Question: My wife is Canadian and I just became PR and came to Canada. Neither of us have a TFSA at this point. Should we just open up one and max it out and then open a second one or should we open up two right away?

[@evansweet1382]

Good starter video but mentioned nothing about withholding tax on us stocks/ETFs

[@justismeier9356]

what are the pros and cons between opening up a TFSA with a bank or institution versus an online brokerage company/app?

[@sayjae_code_to_coda]

Do you recommend investing through a bank or an online broker?

[@sugandhagupta5168]

Does this contribution has to be from my Canadian earnings? Can I put my savings that I transferred from India after moving here?

[@Tylenol888]

Question, opening tfsa and put my 20k on gic, does my 20k is safe? Like whatever happen to market, my capital is safe? I will not lose money on gic? Thanks

[@ashleytaylor5070]

Thank you 😊

[@stephandden]

Thanks for watching! 😊

[@LacetteColourFunny]

I know it’s new but are you gonna talk about the new tfsa the gouvernement annonces? In French it’s the celiapp meant to save money to buy a home. There’s not a lot of info so just wandering if you think You’ll talk about it the futur?

[@stephandden]

Hey! Yes, we'll definitely talk about it more in the future 😊 It'll be fun to break down something new!

[@alexandramcdonald1925]

Hi, thanks for your video. I’m a British citizen who has been a permanent resident since 2021. Does that mean that I could pay up to the amount of the last year and a half? My husband is Canadian - I guess it would just be better for him to open the account instead of me? Thank you,

[@Mike-ym6rl]

Thanks for the info. Do we need to report anything annually to the CRA regarding the activity within the TFSA account?

[@stephandden]

No, you don’t need to report anything - your brokerage will do that for you if necessary 😊

[@Faraz70]

Can we have a money market fund in TFSA?

[@katsadventures7027]

How do you know? If your tax-free savings account is maxed how do you find these things out?

[@leckmanj]

thanks for the video. Question, I read that if you have an investment in your TFSA that pays out dividends for a US investment is subject to a US withholding tax. Apparently the only tax you could be subject to in a TFSA are withholding taxes on US dividends paid, is that correct? thanks

[@stephandden]

Thanks for watching! 😊 Yes, that’s correct. Unlike the RRSP, the TFSA isn’t included as an apart of the US-Canada tax treaty. But keep in mind that the tax is withheld before the dividend enters your account, so it’s not like you have a tax bill at the end of the year or anything. You’ll often find people holding US listed stocks and ETFs in their RRSPs in order to avoid the 15% withholding tax.

[@mustashfan1o198]

Question: If you hit the contribution limit by dipositing/investing into your TFSA, does that mean you can't gain any money from interest/gains adding to the money you initially put in.?

[@crochetreat]

the answer is at 12:40 🙂

[@lucianoposocco8284]

Great video guys. One question - as a Canadian citizen, currently living in the US, but still having a Canadian bank account can i still open a TFSA by using the money that is currently in that bank account? Note i currently have no need to file a Canadian tax return,

[@moviesfan5513]

I think you need to be resident in Canada for TFSA.

[@LivPoxleitner]

hi, there might be a new TFSA for new home buyers? any information on that? i just heard from ctv vancouver.

[@stephandden]

Yes, the Tax-Free First Home Savings Account! It should be starting next year - we’ll definitely have a video on that later on 😊

[@zxu-zv2yy]

What if I mistakenly withdrew 1500 dollars this year from TFSA and later instead invest 1500 dollars less， I invest to maximum as I forgot that 1500 withdrawn? What should I do now? To withdraw another 1500 dollars? Thank you

[@mihaeladog7187]

Wow, my daughter just turned 18 and she’s always broke 😂. I have to teach her money . Thank you👍

[@stephandden]

Haha! Hopefully this video is helpful 😊

[@DinnerBells]

I am not good with numbers/math etc so I am still confused. What’s the point when the interest is, like, 0.001%? 10k gets you a mere $100 per year? That’s nothing, especially now with the cost of living, inflation etc… Also, what exactly am I contributing to? The money just sits in the account.

[@Daisy-ku6gd]

What if you have contribution room for 50 k and withdraw 3000 dollar, Can you invest back that 3000 and some more since you have a lot of contribution room still?