Any resident of Canada who has reached the age of majority and who has a valid social insurance number (SIN) is eligible to open a TFSA. There’s no maximum age to open or hold a TFSA account and you can hold more than one.

TFSA contributions are not tax deductible, and they have to be made by the account holder. They have a set yearly contribution limit as well as a total contribution limit. In 2022, the annual limit is $6,000 and the total limit is $75,000.

When you contribute less than the maximum contribution limit, the difference is referred to as your “unused contribution room.” Unused contribution room accumulates each year and is carried forward indefinitely, allowing you to catch up in future years. Withdrawals from TFSA accounts will also increase your contribution room in the following year, but not for the year of withdrawal.

It’s important to keep track of your contribution room. If you contribute more than allowed to your TFSA, you will be penalized with a 1% per month penalty tax on the highest excess amount in each month. The tax applies until the entire excess amount is withdrawn or absorbed by new contribution room in subsequent years. The CRA will advise you when an excess contribution occurs.

• Term deposits and GICs 
• Variable interest savings accounts 
• Credit union shares 
• Index-linked term deposits 
• Mutual funds 
• Publicly traded securities 
• Bonds

The relative risks of TFSA investments depend on the type of investment vehicles you choose. Before you open a TFSA, you should discuss your risk tolerance with your investment advisor.