The tax-free savings account (TFSA) is a flexible investment savings vehicle that allows you to earn investment income (including capital gains) tax-free.
Heralded as the single most important personal savings vehicle since the introduction of the registered retirement savings plan (RRSP), the tax-free savings account (TFSA) allows you to earn tax-free investment income from eligible investment vehicles like segregated fund policies.

At a Glance
>> Maximum contribution in 2009 – $5,000, indexed to inflation and rounded to the nearest $500 on a yearly basis
>> Any unused contribution room is carried forward indefinitely
>> TFSA contributions are not tax deductible
>> Income, losses and capital gains from the TFSA are not included in taxable income

Eligibility
>> Canadian residents ages 18 and older with a social insurance number
>> You can have more than one TFSA, but the maximum allowable contribution amount applies to the total of all TFSA policies held
>> Similar to other registered accounts, such as RRSPs, but spousal TFSAs are not allowed

Withdrawals
>> Withdrawals increase contribution room in the following year
>> Do not affect eligibility for federal income-tested benefits and credits such as Canada child tax benefit, working income tax benefit, goods and services tax (GST) credit and old age security benefits
>> Not included in taxable income
>> Withdrawals from the TFSA are not taxable
>> Any time and for any purpose