Why open a TFSA?

Tax-Free Savings Accounts (TFSAs), introduced by the Canadian government in 2009, are one of the best places to build your savings. That’s because they are indeed tax-free:

You pay no tax on interest, dividends or capital gains earned inside a TFSA.
You pay no tax on withdrawals you make from a TFSA.

TFSA contribution limits

Because TFSAs offer such great benefits, the government put limits on the amount that you can contribute. You can find your personal contribution limit on your latest Notice of Assessment and find out more about contribution limits here.

If you’ve never contributed to a TFSA and you were 18 or older in 2009, you have a cumulative total of $88,000 in contribution room in 2023 — but even if you start small, a TFSA can help you meet both short-term and long-term financial goals.

Any unused room simply carries over to the following year. In fact, you don’t even lose your contribution room when you withdraw money from a TFSA. Every dollar you take out is added back to your contribution room the following calendar year.

Best of all: This is a plan you can keep contributing to for life, because there is no age limit. So, it will be there for you to save for earlier goals like buying a home and investing in your kids’ education all the way through to later-in-life goals like travelling in retirement.

Step-by-step: how to invest money through a tax-free savings account

We know forms aren’t any fun, but we’ve made opening a TSFA as easy as possible for our members. Here’s how to begin growing your money tax-free.

Open your TFSA investment account
Make your first contribution
Put your money to work
Build your savings
Use and replenish your money

1. Open your TFSA investment account

Stop by your local Prospera branch, tell us you want to open a TFSA and we’ll get you set up — or, if you want to manage your investments yourself, you can open a TFSA using our online investing tools.

2. Make your first contribution

Your first deposit doesn’t have to be a big one — contribute $50, $100 or whatever you can afford right now. In fact, one of the most effective investing strategies is to set up regular contributions rather than making one big contribution.

3. Put your money to work

Even though a TFSA has “savings account” in its name, that doesn’t mean you should keep your TFSA money in cash. Instead, choose a mix of investments that matches what you need money for, when you need it and how you feel about market ups and downs. Here are a few ways you can invest your money.

4. Build your savings

Commit to adding to your TFSA on a regular basis — every paycheque or once a month tends to work well for most people. As you make contributions, pay attention to how it’s doing, checking in with your advisor at least once a year to see if you need to adjust your investments to better match new goals.

5. Use and replenish your money

Once you’ve saved enough to reach your first goal, feel free to withdraw your money. No taxes on withdrawals feels good! Then, start planning to replenish the amount you withdrew. You can deposit right away if you have contribution room available or wait until the following calendar year if you don’t.

Check-in with us anytime

Reach out to a financial advisor at your local Prospera branch anytime to talk about your TFSA strategy and make sure you're taking full advantage of your plan. We’ll talk you through the pros and cons of different investing options and help you make the most of your TFSA.

Work With An Advisor