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Cross-border & specialty

Tax-Free Savings Account TFSA

A Canadian registered account where investment growth and withdrawals are completely tax-free, within an annual contribution limit.

Part of the Cross-Border Investing (CA + US) course · Lesson 13 of 17

What it is

A Tax-Free Savings Account is a Canadian government-registered account that lets residents invest with no tax on the income, dividends, or capital gains earned inside it, and no tax on withdrawals. Contributions are made with after-tax dollars, so there is no upfront tax deduction. Unused contribution room carries forward, and the annual limit is set by the government each year.

Why it matters

A TFSA is flexible because money can be withdrawn anytime tax-free and the withdrawn room is restored the following year. The main cross-border pitfall is that foreign withholding tax on US dividends still applies inside a TFSA and cannot be recovered, so holding US dividend payers in a TFSA can quietly cost you 15% of those dividends.

How it's calculated

A TFSA is an account type, not a metric; your available room is the sum of annual limits since you became eligible, plus prior withdrawals added back, minus contributions made.

How Quintarthai uses it

Quintarthai does not manage accounts, but you can research dividend yields and tax-relevant metrics for any holding across the screener and company pages at /app/.

Cross-border note. US dividend withholding tax is not exempt or recoverable inside a TFSA, unlike in an RRSP, so US dividend stocks are often better held in an RRSP for tax efficiency.

FAQ

Is the TFSA only for cash savings?
No. Despite the name, a TFSA can hold stocks, ETFs, bonds, and funds, and all their growth is tax-free. The 'savings account' label is just the legal name.
What happens if I over-contribute?
The Canada Revenue Agency charges a penalty of 1% per month on the excess amount until it is removed, so it is important to track your contribution room carefully.
Related terms
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