TFSA Contribution Limits & Withdrawal Rules
A Tax-Free Savings Account (TFSA) is a great tool to help you save for retirement or a major purchase. Learn more about annual T F S A contribution limits and withdrawal rules to help keep your savings journey worry-free.
Total Contribution Limits
What are the T F S A contribution limits for past years?
The key to growing your T F S A is to take advantage of it as soon as possible. Since 2009, Canadian residents aged 18 and older are eligible to contribute to a T F S A. And with an annual contribution limit that is subject to change each year, this will impact your overall lifetime contribution limit. When managing a T F S A, it’s important to know where you are with your contribution limit, since over-contributions will incur a penalty tax.
Our chart below allows you to view past contribution limits and makes it easy to help you determine how much total room is left in your T F S A.
Year | Contribution Limit | Cumulative limit |
|---|---|---|
| 2025 | $7,000 | $102,000 |
| 2024 | $7,000 | $95,000 |
| 2023 | $6,500 | $88,000 |
| 2022 | $6,000 | $81,500 |
| 2021 | $6,000 | $75,500 |
| 2020 | $6,000 | $69,500 |
| 2019 | $6,000 | $63,500 |
| 2018 | $5,500 | $57,500 |
| 2017 | $5,500 | $52,000 |
| 2016 | $5,500 | $46,500 |
| 2015 | $10,000 | $41,000 |
| 2014 | $5,500 | $31,000 |
| 2013 | $5,500 | $25,500 |
| 2012 | $5,000 | $20,000 |
| 2011 | $5,000 | $15,000 |
| 2010 | $5,000 | $10,000 |
| 2009 | $5,000 | $5,000 |
What is a TFSA?
A T F S A is a registered investment savings account that can help you save for retirement or big purchases. Any resident of Canada, over 18 with a valid social insurance number (S I N) can open one.
T F S As can help you to save for long-term financial goals but, unlike other investment accounts, withdrawals are never taxed. This makes them helpful for shorter-term financial goals as well.
It’s important to keep in mind that any money you deposit into your TFSA account counts against your cumulative TFSA contribution room, even if you first take money out and put it back.
Benefits
Why a T F S A is a great choice for you
From tax savings to flexible withdrawals, there are several great reasons to open a TFSA.For starters, any money you earn from investments held in a TFSA, such as capital gains, dividends, or interest, is tax-free–even when withdrawn.
Tax-free withdrawals
Whether you want to take out some or all the money you hold in your TFSA, your withdrawals are not taxed. This means any funds you pull out won’t get added to your taxable income at tax time.
Balanced investments
A T F S A can hold a mix of investment types. You can hold your deposits as cash, or buy guaranteed investment certificates (G I Cs), mutual funds, bonds, exchange-traded funds (E T Fs) or stocks.
Flexible access to cash
With a T F S A, your money isn't locked in for a set period. If you need to pull out cash for any reason, you can. This flexibility makes them great for saving for planned expenses or purchases.
Re-investable earnings
The more you earn, the more you can reinvest. When investments grow inside a TFSA, your gains can be reinvested with no impact on your contribution room. It all adds up.
T F S A contribution & withdrawal rules
When putting money in, or taking money out of your T F S A, the following rules can help you avoid penalties and unexpected costs.
Eligibility: To open a T F S A, you must be a Canadian resident, at least the age of majority in your province or territory (18 or 19 depending on the province/territory), and have a valid Canadian Social Insurance Number (S I N).
- Contribution limit: You can contribute the maximum annual limit, which is set by the government yearly, and any unused room is carried over into the next year.
- Over-contributions: If you contribute more than your allowed limit your overage is penalized at 1% per month.
- Previous withdrawals: If you took money out in previous years, the amount adds back to your contribution room for the current year.
- Tax reporting: Contributions, administrative fees, or interest on funds borrowed to make a contribution aren’t tax-deductible.
- Timing: Withdrawals from your T F S A can be made anytime without penalties, provided the investment assets are liquid.
- Taxes: All withdrawals are tax-free and don’t need to be reported on your income tax return.
- Tax reporting: Since they’re non-taxable, withdrawals won’t impact your tax bill at tax time.
- Non-residents of Canada: Non-residents can make withdrawals at any time but can’t re-contribute until they return to Canadian residency.
- Effect on contribution space: Any amount you withdraw is added back to your contribution room on January 1st.
T F S A calculator
Use our TFSA calculator to find out how much you could save by investing your money into a TFSA compared to a regular savings account.
T F S A Contribution limits and withdrawal FAQs
T F S A Contribution limits
Your annual TFSA contribution room resets every year on January 1. If you take money out of your account, that’s when it’ll be added back to your contribution room.
Let’s say you withdraw $1,000 over the summer to pay for a vacation. That amount will be added back to your contribution room along with the new annual TFSA contribution limit on January 1st. Happy New Year!
T F S A over-contributions are penalized 1% on the largest excess amount in the month the over-contribution was made. The penalty remains in force monthly until the excess is withdrawn.
E.g. You over-contribute $1,000 in November. If you don’t pull it back out, your penalty is $10 for the months of November and December, for a total of $20.
If you withdraw money from your TFSA, you can only put it back that same year if you have contribution room left. If not, you need to wait until January 1 for your limit to reset.
If you’ve already gone over your annual limit and re-contribute anyway, you’ll be issued a penalty tax by the Canadian Revenue Agency (CRA).
T F S As offer unlimited carry-over, so if you’ve missed a few years, that contribution room carries into the future. To figure out how much room you have left, simply add up the maximum allowable amounts from the years you’ve missed. (Scroll up to see our historical limits chart.)
You can also view your contribution through your C R A account online, or by contacting the C R A’s Tax Information Phone Service (TIPS).
Only the named account holder can legally make contributions to a T F S A. You can, however, give your spouse money they can use to contribute to their own T F S A. Keep in mind though, that any income earned within their account will be theirs.
T F S A Withdrawals
Withdrawals from your TFSA does impact your contribution limit in a given year. Withdrawals are added to your available contribution limit starting January 1st of the following year.
TFSAs are extremely flexible. You can withdraw any amount of money at any time, tax-free. This makes them a great option for saving up for a large purchase, or as a source of cash flow.
No. Withdrawals from a TFSA are not taxed. Whether you withdraw your initial capital, or interest earned within your account, the full amount is yours to keep.
TFSAs have a fixed annual contribution limit. By withdrawing funds within the same year, the total amount of contributions remain the same. Withdrawals are added back to the total TFSA contribution room on January 1st.
If you recontribute and go over the annual limit, the CRA will charge you a penalty tax.
Yes. You can withdraw any amount from your TFSA at any time. Just remember withdrawals don’t lower your total contributions for the year, so annual contribution rules still apply.
Learn more about investing in T F S As
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Ways to contact us
There are various ways to get in touch. Choose your preferred method.
Investing with a professional
Interested in learning about how you can save for the future with a TFSA? Make an appointment with a BMO investment professional today.
Self-Directed T F S A
Let us contact you to open a self-directed TFSA.