What Age Can You Open A TFSA (Tax Free Savings Account) In Canada

One common question regarding the TFSA (Tax Free Savings Account), is

How old does someone have to be to open a TFSA account?

Given that this is Canada, the answer is not as straight forward as you might think.  Basically, you have to reach the age of majority in order to enter into a financial contract, which is what happens when you open a TFSA.

The problem is that the age of majority is determined by each province and territory, and they are not synchronized.

First, let’s cover two quick TFSA rules:

  1. $5,000 of TFSA contribution room is accrued each year starting when you turn 18 years of age or 2009, whichever is later.
  2. You need to be a Canadian resident to open up a TFSA account. Here is a link to the official Canadian resident definition.

At what age can someone open a TFSA (Tax Free Savings Account) in Canada

Some provinces allow 18 year olds to open a TFSA account, but in other provinces you must wait until you are 19 years of age.

Here are the provinces that allow 18 year olds to open a TFSA account:

  • Ontario
  • Quebec
  • Alberta
  • Manitoba
  • Saskatchewan
  • Prince Edward Island

Here are the provinces/territories that only allow 19 year olds to open a TFSA account:

  • British Columbia
  • New Brunswick
  • Newfoundland and Labrador
  • Northwest Territories
  • Nova Scotia
  • Nunavut
  • Yukon

It is important to note that the annual TFSA contribution room will accrue from the 18th birthday, even if you can’t open up an account until the following year.  If you live in a province where the age of majority is 19, you will not lose out on any TFSA contribution room – but you will have to wait an extra year to use it.

Example 1:  Person turns 18 in province where age of majority is 18

Steve lives in Ontario (age of majority is 18) and turned 18 on June 1, 2011.  Starting on his 18th birthday, Steve can set up a TFSA account and contribute a maximum of $5,000.  On January 1st of 2012, he gets another $5,000 of TFSA contribution room and can contribute another $5,000.

Example 2:  Person turns 18 in province where age of majority is 19

Ann lives in Nova Scotia (age of majority is 19) and also turned 18 on June 1, 2011.  Starting on her birthday, Ann now has $5,000 of TFSA contribution room, but is not allowed to open up a TFSA account because she has not reached the age of majority.  On January 1st of 2012, she gets another $5,000 of TFSA contribution room for a total of $10,000.  Ann turns 19 on June 1, 2012 and can finally open up a TFSA account.  At that point, she can contribute up to $10,000.

Example 3: Person turns 18 before 2009

Susan lives in Canada and turned 18 in 1998.  She started accumulating TFSA contribution room in 2009 (the first year of the program).  In 2012, Susan decides to set up a TFSA account.  She has a total of $20,000 of contribution room ($5,000 each year for the years 2009, 2010, 2011 and 2012) and can contribute up to $20,000 in 2012.

More information

TFSA Government age and residency information

TFSA rules and contribution limits

6 replies on “What Age Can You Open A TFSA (Tax Free Savings Account) In Canada”

TFSA’s look like a gift to Canada’s Big Banks.
They promote them heavily, and give you 2% interest the first year then 1.5% after that.
Result: after 10 years investing the maximum $5000 per year, you will have earned $4800 interest, saving yourself about $1920 in tax over 10 years.
Hardly a windfall.
Meanwhile, the banks will have captive deposits of $5000 X 10 years X the number of TFSA accounts = $ billions!
Could this be a sweetheart deal to re-capitalize Canada’s banks on the cheap?

It’s all about the marketing from the big banks. I personally have a TFSA as a tax free trading account and have been very happy with it.

Hmm so technically I could live in B.C. and then move to Toronto when I’m 18 and come back to BC and have $5000 extra in tax free savings? 🙂

That’s very interesting. Glad to know you start accumulating at 18. I miss out on one year of return but I least you can catch up.

I agree with youandthrifty, the banks are just better at selling because you can hold many kind of investment inside your TFSA. It’s not just what the banks are selling you. It’s the same for a RESP and a RRSP

@Xena – You can open up a TFSA at a discount brokerage as well.

@Y&T – So are you saying you are not 18 yet? ;P

@Doc Stock – Yes, it is strange.

@Passive – Yes, you can pretty much have any type of investments in TFSA, RESP, RRSP etc.

Do you know what are the rules for recent immigrants to Canada? I will become permanent resident in 2011, but I also turned 18 before 2009. What rule applies, age or residence start date? Thanks

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