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Glossary term
TFSA — Tax-Free Savings Account
Canadian registered account where investments grow tax-free and withdrawals are tax-free. 2026 limit: $7,000/year. Cumulative room since 2009 = $109,000. Room accrues from year of tax residency.
Related terms
RRSP
Tax-deferred retirement account: contributions deduct from income, grow tax-free until withdrawal. 2026 limit…
FHSA
Hybrid TFSA+RRSP for first home purchase. $8,000/year limit, $40,000 lifetime. Contributions deduct from inco…
RESP
Tax-deferred education savings account. Government adds CESG (20% match up to $500/year, $7,200 lifetime). $5…
CESG
Free government grant inside RESP: 20% match on contributions, $500/year max, $7,200 lifetime per child. 'Gua…
HBP
Borrow up to $60,000 from your RRSP for first home purchase tax-free. Repay over 15 years starting year 2 aft…
CCPC
Private corporation with >50% Canadian-resident ownership. Eligible for SBD — 9% federal corporate tax on fir…
Frequently asked questions
What is the 2026 TFSA contribution limit?
The 2026 annual limit is $7,000. Cumulative room for someone who's been a tax resident since 2009 is $109,000; unused room carries forward indefinitely.
Do TFSA withdrawals restore contribution room?
Yes, but not immediately: the withdrawn amount is added back to your room only on January 1 of the following year. Re-contributing in the same year above your available room triggers a 1%-per-month overcontribution penalty.
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