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Any income earned in a Tax-Free Savings Account (TFSA) in the form of dividends, capital gains, or even interest is exempt from Canada Revenue Agency taxes. So, investing in the TFSA can help you generate tax-free income for life.
While it is called a savings account, the TFSA is a registered account where you can hold a variety of qualified instruments such as stocks, bonds, and mutual funds, among others.
However, according to a Bank of Montreal survey, 47% of Canadians have their TFSA savings in cash, thereby missing out on opportunities for tax-free growth.
In 2024, the TFSA contribution limit increased to $7,000, raising the maximum cumulative contribution limit to $95,000. Comparatively, the average TFSA account balance increased by 9% year over year to $41,510 in 2023.
You can use a portion of your TFSA contribution room to hold quality TSX stocks such as Brookfield Asset Management (TSX:BAM) and…
