TFSA

It stands for Tax Free Savings Account.

==Main Idea 💡: You don't have to pay any taxes to the benefits you earned by investing through your TFSA account==

It is large umbrella holding:

current contribution amount (2024): 7000

Basics

Treat it as tax free investment account. It's like a gift offered by govt to encourage Canadians to invest long term

Usually people use it as fancy savings account. It gives you 2% interest amount that is not taxed. But this is not the best way to use TFSA
There is a limit to amount that can be contributed to TFSA, this limit depends on age and not the income.
- If you were 18 or older in 2009, your TFSA contribution room grows each year even if you do not file an income tax and benefit return or open a TFSA.
- If you turned 18 after 2009, your TFSA contribution room starts in the year you turned 18 and your TFSA contribution room accumulates every year after that year.
You can withdraw amount anytime without any taxes or fees
Always try to keep your TFSA amount maxed out.
You can check your contribution room from CRA website but its not the most reliable ways. The information gets updated only march of next year. So its extremely important to keep track of your own contributions and with drawls from TFSA.
Penalty of 1% every month for over contributions.
You can open multiple TFSA accounts in multiple financial institutions
- For example: You can open TFSA savings account with Scotiabank and also open TFSA investing account with Questrade.
Only for Canada investments, does not work for other country investments like USA.

The amount you earned from your investment does not take away from available contribution room.
Total value inside TFSA can and should exceed your contribution limit since investments are growing.
If you invested 44k in your TFSA and it becomes 100k, that is okay and you don't pay any taxes on this earned income. There is no limit on the value of your TFSA, only limit is the amount of money you put in. And the best part, if you withdraw this 100k from TFSA, you don't pay any taxes on withdraw and it adds to the contribution room, so that means you will extra 100k in contribution next year and also additional 7k that you get every year.
But we need to be careful, because loss in amount can negatively effect you, so never investment to risky stocks with TFSA. ==Always reliable and less risky investments through TFSA==.
Best investment is the dividend stocks and ETFs and not growth stocks. When you sell stocks you still have to pay taxes (capital gains are always taxed but lower than other)