A Tax-Free Savings Account (TFSA) is a registered account available to Canadian residents aged 18 and older. Despite the name, it is not just for cash savings: you can hold cash, GICs, ETFs, stocks, and bonds inside one, and none of the growth is ever taxed.
How a TFSA works
- Contribution room accrues every year from the year you turn 18 and became a Canadian resident. Unused room carries forward indefinitely.
- Contributions are made with after-tax dollars, so they are not tax-deductible the way an RRSP contribution is.
- Growth, dividends, interest, and capital gains inside the account are never taxed.
- Withdrawals are tax-free, and the amount you withdraw is added back to your contribution room on January 1 of the following year.
- Over-contributing past your limit triggers a 1% monthly penalty from the CRA, so the current-year number matters.
How Mozaic tracks your TFSA
In Mozaic, TFSA is a first-class account type. Connect it through SnapTrade or Plaid, or add it by hand, and its balance and the holdings inside it roll into your total net worth in your base currency.
Mozaic also publishes a free TFSA contribution room calculator, because the rules are public and depend only on your age and residency. It does not file anything with the CRA, so always confirm your official room in CRA My Account before you contribute.
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