A Tax-Free Savings Account (TFSA) restricts the amount you can contribute each year (this is known as your contribution limit) however, funds that remain in the account can grow tax-free and in certain circumstances (as long as you have not exceeded your yearly limit) may exceed your overall contribution room (including any unused amount). Be mindful that there are tax consequences for over contributions.
These previous Investing Questions questions may help as you move forward:
- “What happens to dividends earned in a TFSA?”
- “How do I determine my RRSP and TFSA available contribution room?”
- “Are there rules when trading within registered accounts?”
Speak with a registered financial representative or tax professional for advice that fits your personal financial circumstances. Learn more about TFSAs, investing and other financial topics by visiting GetSmarterAboutMoney.ca