Tax-Free Savings Accounts (TFSA) are a way for individuals 18 and older to set money aside tax-free throughout their lifetime.
A TFSA can hold a combination of eligible investments, such as stocks, bonds, managed portfolios, mutual funds, term deposits, and cash. The annual contribution limit in 2020 is $6,000, but this amount may change annually based on inflation. As with RRSPs, you can carry forward the unused contribution amount to future years.
Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn.