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TFSA (Tax-Free Savings Account)

A Canadian account where investment growth and withdrawals are free of tax.

Canadian InvestingBeginner

Definition

Contributions are not deductible, but gains, interest and dividends inside the account are not taxed, and withdrawals are not taxed. The annual limit is set by the government, and withdrawn amounts are added back to your room the following calendar year.

Watch out for

Over-contributing is penalized monthly. Foreign dividends in a TFSA can still face withholding tax.

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