TFSA Rules And Contribution Limits For 2020 Tax-Free Savings Account

The tax free savings account (TFSA) has been available to Canadians for a while now.  One of the benefits of being a year older is that you now have more contribution room available to invest in your TFSA.

If you turn 18 this year, your contribution limit is $10,000.  If you turned 18 prior to this year, your TFSA contribution room will be $5,000 per year starting from the year you turned 18 or 2009, whichever is later up to to 2012.  2013 and 2014 have $5,500 contribution limits and 2015 is $10,000.  2016, 2017, 2018 the limit was $5,500 and the limit is going up to $6,000 for 2019.

In other words – here are the annual contribution limits per year – keep in mind you have to be 18 to accrue any TFSA contribution room.

2009 – $5,000

2010 – $5,000

2011 – $5,000

2012 – $5,000

2013 – $5,500

2014 – $5,500

2015 – $10,000

2016 – $5,500

2017 – $5,500

2018 – $5,500

2019 – $6,000

2020 – $6,000

My wife and I have made full use of our TFSA room because we have a $20,000 emergency fund which fits our TFSA accounts like a glove.  There are many different potential uses for TFSA accounts, but keeping an emergency fund is a good one, since all interest earned in the account is tax free.  We keep the emergency fund TFSA at ING Direct – see how to get a $25 bonus here from ING.

Use the ING referral code 33089336S1 and get a $25 bonus in your account!

The basic rules and limits haven’t changed since last year.  Make sure you understand how the withdrawal rules work (withdrawal amounts get added to your contribution room starting on Jan 1 of the NEXT year).

Basic TFSA rules for 2015

  • Contribution room increases by $5,000 per year starting in 2009 or the year you turned 18, whichever is later until 2012
  • Contribution room for 2013 and 2014 is $5,500 for the year..
  • Contribution room for 2015 is $10,000.
  • Contribution room for 2016 is $5,500.
  • Unused contribution room carries over indefinitely.
  • Any contributions made to the TFSA will result in a similar reduction to your available contribution room.
  • Any withdrawals from your TFSA will result in a similar addition to your available contribution room, but only effective January 1st of the following year.  See my “December strategy” for details on this.
  • All income earned in the TFSA is not taxable.
  • All withdrawals are not taxable.
  • There is no “contribution receipt” issued for TFSA accounts.  Any money contributed to a TFSA has already been taxed (at your personal income level) and doesn’t get taxed again.
  • You can have multiple TFSA accounts at different financial institutions.  However it is up to YOU to keep track of your contributions.  The government knows if you go over the limit and will charge an over-contribution fee.  Don’t expect any kind of friendly phone call if you go over your limit – the government will just start charging the fee and it will be payable on your next tax return.

Type of investments allowed in TFSA accounts

It’s a common perception that only bank accounts and GICs are allowed in TFSAs.  This is not true – whatever investments are allowed in an RRSP account are also allowed in TFSAs.   Stocks, bonds, mutual funds, index funds, ETFs (Exchange Traded Funds), GICs, high interest savings account are all eligible for TFSAs.

Where to set up a TFSA Account

Plenty of TFSA options:

  1. Discount brokerage – This is the place to buy stocks, ETFs, bonds, mutual funds, index funds.  See my Canadian online discount brokerage comparison for a complete look at options and fees.  Questrade brokerage is my personal favourite.
  2. Banks – This is the most convenient option for high interest savings accounts and GICs.
  3. Financial advisor – If you have an advisor of some sort, they should be able to set up an account for you.

68 replies on “TFSA Rules And Contribution Limits For 2020 Tax-Free Savings Account”

Am I correct that as of Dec 31, 2012, assuming one was 18+ since the inception of TFSAs, my maximum contribution limit would be $20,000?

@ Ralph:

One must also be a resident of Canada from 2009 through 2012 as well.
If so, then yes the max TFSA contribution limit is $20K.

Also bear in mind that any TFSA contributions will reduce the amount available for use.


Thanks for all the information MIKE. I have a mutual fund account which works through my TFSA. But, I did a mistake of choosing high risk portfolio through my TFSA. So if i loose money, I wont able to claim it in Tax return.

My whole idea of using TFSA and mutual fund is to save some money for my MBA which I am planning 3 years from now, which make me 33 when i complete my MBA. My Annual salary is 75k $ right now.

Didnt started my RRSP though my company contributes 10 %, but working on it. Planning to buy a house but can save either for house or MBA.

I will be grateful if you can write an article on How to save for higher education. ( 100k $ saving )


Does the past contribution limit depend on when the tfsa account is opened? If I open a Tfsa account today, do I get the benefit of past year’s limits? How much could I contribute?

I have maxed my tfsa ,I bought stocks which have some losses,i know you cant claim losses, but can I cash in my total account and then add the max total the next jan 01.thanks john

I know that interest earned on TFSAs are not taxable even if you make a withdrawal but what if you purchase stocks with your TFSA and have a gain?

can i take my tsfa account out of one bank and put it into another bank at no risk to me.

Can I put and additional 4500 dollars into my tfsa for 2015 as per the budget

Can I hold a mortgage in my TFSA ?
On and income property I own ?
Or as a mortgage on someone home ?
Let say my TFSA has $35,000.00
My wife has a TRFA with $35,000.00
Can we hold a mortgage on someone home our on an income building we own make payment back to our TFSA Acc:
And sheltering our interest income.
Thank’s Reg

How do you determine if you should use a Beneficiary or a Successor Holder and what are the implications

From 2009 to 2015 what is the maximum total of contributions to my TFSA allowed? Also what amount will be allowed to be put into my TFSA for 2016?

Is there a limit that you can put into a tax free account in a lifetime?

Madeleine Simpson

Leave a Reply

Your email address will not be published. Required fields are marked *