A Tax-Free Savings Account (TFSA) is a savings and investment account where your money grows tax-free. You can hold cash, stocks, bonds, mutual funds, and more inside a TFSA. Every year, CRA adds to your TFSA contribution room. For 2026, the annual limit is $7,000. If you have never contributed, your total room could be as high as $109,000 (depending on your age). When you withdraw money, you get that room back the following year. Any interest, dividends, or capital gains earned inside your TFSA are not taxed - even when you withdraw. This is different from a regular savings account, where investment earnings are taxed as income. You can hold cash, GICs, stocks, bonds, ETFs, and mutual funds in a TFSA. The same types of investments you would hold in a regular brokerage account can often go in a TFSA. Over-contributing to a TFSA results in a monthly penalty tax. CRA tracks your contribution room. If you are not sure of your room, you can check CRA My Account or your Notice of Assessment.