Project the tax-free growth of your Tax-Free Savings Account (TFSA) balance and compare it to an equivalent taxable account.
2025 TFSA contribution limit (example)
This calculator projects the growth of a Tax-Free Savings Account (TFSA) balance from your current age to your planned retirement age, and compares the tax-free TFSA balance to what an equivalent amount would be worth in a fully taxable account at your marginal tax rate.
This calculator divides your annual contribution into equal monthly amounts and compounds your balance monthly: each month, growth is calculated on the current balance and added, and then the monthly contribution amount is added. Because all TFSA growth and withdrawals are tax-free, the full projected balance is yours - the calculator also shows what an equivalent balance would be worth in a taxable account, after applying your marginal tax rate to the growth portion.
Formula: Each month, Growth = Balance × (Annual Return ÷ 12); Balance = Balance + Growth + (Annual Contribution ÷ 12). Final TFSA Balance = Balance after (Years to Retirement × 12) months. Taxable-Equivalent Value = Final Balance × (1 − Marginal Tax Rate). Tax Savings = Final Balance − Taxable-Equivalent Value.
Example: Starting with a CA$10,000 TFSA balance at age 30, contributing CA$7,000 per year until retirement at 65 (35 years), at an expected 6% annual return (example rate — enter your expected rate), the TFSA would grow to about CA$912,317 tax-free. At a 30% marginal tax rate (example — for comparison), an equivalent fully taxable account might be worth roughly CA$638,622 after tax on the same nominal balance - illustrating a tax savings of about CA$273,695 from holding these investments in a TFSA. (Note: this example is for illustration purposes only and the taxable comparison is simplified - actual taxable accounts are taxed annually on income, not just at the end.)
A Tax-Free Savings Account is one of Canada's two main tax-advantaged savings vehicles (alongside the RRSP - see our RRSP Calculator). Unlike RRSP contributions, TFSA contributions are not tax-deductible - you contribute after-tax dollars. However, all investment growth (interest, dividends, and capital gains) inside a TFSA is completely tax-free, and withdrawals are tax-free at any time with no impact on income-tested benefits like the GST/HST credit, Old Age Security (OAS), or the Canada Child Benefit. Your TFSA contribution room accumulates each year starting from age 18 (or when you became a Canadian resident, if later), based on the annual TFSA dollar limit set by the CRA (CA$7,000 for 2025), plus any unused room carried forward from previous years - unlike an RRSP, withdrawals from a TFSA add back to your contribution room, but only starting the following calendar year. Over-contributing beyond your available room results in a penalty tax of 1% per month on the excess amount. TFSAs are extremely flexible - they can be used for retirement savings, an emergency fund, a major purchase, or any other goal, and can hold a wide range of investments including cash (HISA), GICs, stocks, bonds, and ETFs.
Your TFSA contribution room accumulates each year you're 18 or older and a Canadian resident, based on the annual TFSA dollar limit set by the CRA (CA\$7,000 for 2025), plus any unused room from previous years. If you've never contributed and have been eligible since the TFSA started in 2009, your cumulative room could be substantial - check your CRA My Account for your exact available room.
Withdrawals from a TFSA are completely tax-free and don't affect your income for tax purposes or income-tested benefits. The amount withdrawn is added back to your contribution room, but only starting in the following calendar year - so re-contributing the same amount in the same year you withdrew it (if you've already used your room) could result in an over-contribution penalty.
It depends on your situation. RRSPs provide an immediate tax deduction and are often favoured if you're in a high tax bracket now and expect a lower one in retirement. TFSAs don't provide a deduction but offer fully tax-free growth and withdrawals, and don't affect income-tested benefits - often favoured for lower-income earners, short-to-medium-term goals, or as a complement to RRSP savings. Many people use both - see our RRSP Calculator to compare.
No - it's used only to calculate the "taxable-equivalent value" comparison, showing roughly what your balance might be worth if it had grown in a fully taxable account instead. Your actual TFSA balance and growth are completely unaffected by tax, regardless of this input.
A TFSA can hold a wide range of qualified investments, including cash, GICs, mutual funds, ETFs, stocks, and bonds - not just a savings account. The "tax-free" feature applies to whatever investments you hold inside it, which is why TFSAs are commonly used for long-term investing as well as short-term savings.
The CRA charges a penalty tax of 1% per month on the highest excess TFSA amount for each month the over-contribution remains in the account. This can add up quickly, so it's important to track your contribution room carefully, especially around withdrawals and re-contributions in the same calendar year.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial or tax advice. The expected return rate and marginal tax rate used are examples only and do not represent guaranteed returns or your actual tax rate - investment values can fall as well as rise. TFSA contribution limits and tax rules are set by the CRA and can change - always verify your current contribution room and consult a qualified financial adviser or tax professional for advice specific to your situation.