A Tax-Free Savings Account (TFSA) allows your savings to grow tax-free, and you can withdraw money at any time without paying tax on any gains you make from selling the stocks.
Withdrawals you make can be re-contributed in the same year if you haven’t contributed more than the current maximum of $5,500 a year or in the following year. Investment income earned by, and changes in the value of your TFSA investments will not affect your TFSA contribution room for current or future years. Read this previous question to learn more.
Trades within your TFSA can be made as often as you like, without having to pay a capital gains tax. However, note that conversely you cannot use capital losses on investments in your TFSA to offset the gains. You should be aware that the Canada Revenue Agency (CRA) may audit a TFSA if investors are using their TFSAs to operate a business of trading securities – for example, if trades are too frequent and you earn large gains. Speak to a registered financial advisor or tax professional to learn more or learn more about TFSA’s on the CRA’s website.