By Jaclyn Law on February 11, 2025 Estimated reading time: 7 minutes
Each Jan. 1, Canadians get fresh contribution room in their tax-free savings accounts. Find out this year’s contribution limit, the overall limit and more.
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The tax-free savings account (TFSA) is one of the best ways for Canadians to grow their money. This registered account (meaning that it’s registered with the federal government) offers tax-free growth and tax-free withdrawals—a one-two punch that no other Canadian registered account offers.
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Using a TFSA can help you meet your financial goals, whether you’ll need access to your savings soon (think: wedding or buying a car) or far in the future (retirement). A recent EQ Bank survey found that:
Most Canadians (87%) are saving towards short- to mid-term goals, such as vacation or travel (51%), an emergency fund (48%), home renovations or repairs (34%) or a car purchase or repairs (32%).
The vast majority of Canadians (82%) using TFSAs to save said they earn interest on their savings in the account.
But there’s a limit to how much you can put in a TFSA. Near the end of each year, the government announces the maximum contribution room for the next year. The TFSA contribution limit for 2025 is $7,000.
Let’s look at how to find out your total contribution room, how the TFSA actually works, the types of assets it can hold, and more.
What’s your personal TFSA contribution limit?
Your TFSA contribution limit each year is the total of:
Your unused TFSA contribution room from previous years.
The new contribution room for this year—in 2025, it’s $7,000.
TFSA withdrawals made in the previous year, if applicable.
Your TFSA contribution room starts accumulating in the year that you turn 18, even if you don’t open an account or file a tax return. If you were born in or before 2009—the year the TFSA launched—your cumulative contribution limit as of Jan. 1, 2025, is $102,000. In the table below, you can see all of the annual TFSA limits dating back to 2009. To calculate your personal limit, use MoneySense’s handy TFSA contribution room calculator.
Year
Annual TFSA limit
Cumulative TFSA limit
2009
$5,000
$5,000
2010
$5,000
$10,000
2011
$5,000
$15,000
2012
$5,000
$20,000
2013
$5,500
$25,500
2014
$5,500
$31,000
2015
$10,000
$41,000
2016
$5,500
$46,500
2017
$5,500
$52,000
2018
$5,500
$57,500
2019
$6,000
$63,500
2020
$6,000
$69,500
2021
$6,000
$75,500
2022
$6,000
$81,500
2023
$6,500
$88,000
2024
$7,000
$95,000
2025
$7,000
$102,000
If you’ve made any TFSA contributions over the years and aren’t sure how much room you have left, you can do any of the following:
Any Canadian aged 18 or older with a valid social insurance number (SIN) can open a TFSA.
TFSA contributions (cash or investments) grow tax-free. You will never have to pay income tax on the interest, capital gains or dividends earned inside this account.
You can make TFSA withdrawals anytime, and they’re always tax-free. (Keep reading for tips about replacing withdrawals.)
TFSA contributions are not tax-deductible, meaning they will not lower your taxable income, unlike with registered retirement savings plans (RRSPs).
Unused TFSA contribution room carries forward indefinitely. So if you get a work bonus or a hefty raise, you can catch up with your contribution room.
Because a TFSA is a registered account, you can’t claim any capital losses on your income tax return. You do not claim any capital gains for that matter, either.
Some TFSAs pay interest, helping your savings egg grow. For example, EQ Bank’s TFSA Savings Account pays 2% interest on cash savings. Plus, it’s currently offering a 2% match for new deposits made by Feb. 28, 2025.
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Plan carefully to avoid excess contributions
If you do end up overcontributing to your TFSA, know that the CRA charges a penalty tax of 1% per month on the excess for as long as it’s in the TFSA. Keep track of your contributions throughout the year to avoid going over your limit. (Unlike with RRSPs, there is no $2,000 buffer for TFSA overcontributions.) If you make auto-deposits, it’s worth it to do the math and figure out your annual contribution total and how it stacks against your contribution room.
One thing that often trips up TFSA holders: if you withdraw funds from your TFSA, you can only replace them within the same calendar year if you have unused contribution room. If you don’t have room, the recontribution will be viewed as an excess contribution, and you’ll have to pay the 1% tax on the excess amount until you remove it.
How to open an EQ Bank TFSA Savings Account
Opening a TFSA at EQ Bank is simple, and the process is completely digital. The account has no minimum balance or monthly fees. It also pays 2% interest on your savings. (Interest is calculated daily on the total closing balance and paid monthly.)Plus, you’ll receive a 2% match (also tax-free) on new deposits made by Feb. 28, 2025.
The promotion is open to eligible customers who deposit new deposits into their registered account(s) from Nov. 1, 2024, at 12:01 a.m. ET to Feb. 28, 2025, at 11:59 p.m. ET (the “Promotional Period”) and hold such new deposits in their registered account(s) for one year, starting March 1, 2025 (the “Hold Period”). EQ Bank will pay a cash bonus equivalent to 2% of the value of the new deposits (the “Match Bonus”) on a quarterly basis at a rate of 0.5% per Hold Period quarter. New deposits held in GICs within registered accounts will not be eligible for the Match Bonus. Promotion may be changed, cancelled or extended at any time. Conditions apply. Please review the EQ Bank Registered Season Match Promotion Terms and Conditions for details.
Here’s how to open your TFSA at EQ Bank:
Log in or open your EQ Bank account in a few clicks.
Head to “Products,” scroll to TFSA and open an account.
Fund your account and start earning 2.00% interest on every dollar.
Consider locking in funds today at a guaranteed rate.
For GIC terms of less than one year, simple interest is calculated on a per diem basis and paid at maturity. EQ Bank GICs are non-redeemable. Rates are subject to change at any time. Learn more about EQ Bank GICs.
Don’t miss out on bonus TFSA growth
Earning interest inside a TFSA can give your savings a big boost over time, thanks to the power of compounding—and even more so if you get extra interest on your deposits up front. Open an EQ Bank TFSA Savings Account today and watch your savings grow.
About the survey
These findings are from a survey conducted by EQ Bank from Jan. 8 to 10, 2025, among a sample of 1,515 online Canadians who are members of the Angus Reid Forum. The survey was conducted in English and French. For comparison purposes only, a probability sample of this size would carry a margin of error of +/-4.4 percentage points, 19 times out of 20.
This article is sponsored.
This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers.
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Jaclyn Law is MoneySense’s managing editor. She has worked in Canadian media for over 20 years, including editor roles at Chatelaine and Abilities. Jaclyn completed the Canadian Securities Course in 2022.
