A TFSA or a Tax-Free Savings Account is a tax-free investment product that allows your money to grow over time. That means you don’t pay taxes on the money you make inside your TFSA, such as interest, dividends, and capital gains.
If you have a TFSA or are looking into investing in one, you’ve probably heard the term ‘TFSA limit: this refers to the amount of money you can deposit into your TFSA accounts each year. The good news is, your TFSA limit increases every year if you don’t use it.
So, what’s your TFSA limit for 2023?
Here’s the short answer: the annual TFSA dollar limit for 2023 is $6,500 and the cumulative limit is $88,000. But, to make better sense of these numbers, let’s look at how the TFSA limits have changed over time.
| Year | TFSA annual limit | TFSA cumulative limit |
| 2023 | $6,500 | $88,000 |
| 2022 | $6,000 | $81,500 |
| 2021 | $6,000 | $75,500 |
| 2020 | $6,000 | $69,500 |
What does this mean for you?
There are three possible outcomes for you, depending on whether or not you currently have TFSAs:
- Don’t have any TFSAs? This means that, if you choose to invest in a TFSA, you can contribute up to the full cumulative limit of up to $88,000 in 2023. Plus, a TFSA also acts as an estate tool, since adding beneficiaries to your TFSA can help them bypass probate and long wait times. Skip to the next section to find out what to do next to invest in a TFSA.
- Have TFSAs but not sure how much to contribute in 2023? You can contribute the 2023 cumulative limit of up to $88,000 minus the amount you’ve already contributed. For example, if you have $10,000 in TFSAs, you can contribute up to $78,000 to your TFSAs in 2023 ($88,000 – $10,000 = $78,000).
- Have TFSAs that you’ll withdraw from in 2023? You can contribute the cumulative limit of $88,000 in 2023 minus the amount you’ve already contributed and minus the amount you’ll withdraw this upcoming year. For example, if you have $10,000 in TFSAs and withdraw $2,000 from those TFSAs in 2023, you can contribute up to $76,000 in 2023 ($88,000 – $10,000 – $2,000).
What should you do next?
Whether you have a TFSA already or are looking to invest in one, our Vancity team is here to help. Book a call with a financial planner to learn more about your options for this and other investments, including term deposits, mutual funds, stocks, and bonds.
This post is based on information from the Canadian government. To learn more, visit the TFSA information page on the Canada Revenue Agency website. To check your available contribution room, log in or register to get a copy of your CRA Notice of Assessment.
