TFSA Growth Calculator

Why the TFSA beats a taxable account so hard

In a taxable account, every year's growth is skimmed before it can compound — interest at your full marginal rate, dividends and capital gains at preferential rates but still taxed. Inside a TFSA the full return compounds untouched, forever, and withdrawals are tax-free. The "tax saved" figure above compares the two directly using your marginal rate as the annual drag. Over decades, that drag — not the market — is the biggest cost of investing outside shelters.

Contribution room: use it, don't lose track of it

Room accrues every year from the year you turn 18 ($7,000 for 2026; $109,000 cumulative if you were 18 in 2009 and never contributed). Withdrawals come back as room the following January — re-contributing the same year is the classic over-contribution trap at 1%/month. Check CRA My Account before large deposits.

What to hold inside it

A TFSA holding cash at 0.5% wastes the shelter. The account shines with growth assets — index ETFs, dividend stocks, or at minimum a high-interest savings rate inside the TFSA wrapper. The higher the expected return, the more valuable the shelter; that's why the growth-vs-taxable gap widens so fast with return assumptions.

TFSA vs RRSP: the short version

Higher tax rate today than in retirement → RRSP first. Lower or equal → TFSA first. Planning to retire with income near the OAS clawback range → TFSA withdrawals are invisible to the clawback, which quietly tips the scales. Compare both outcomes on your own numbers with the RRSP vs TFSA calculator.