BMO Nesbitt Burns
1501 av. McGill College
Suite 3200
Montréal, QC
H3A 3M8

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Tax-Free Savings Account

People 18 or older can pay up to $6,000 per year in a Tax-free Savings Account (TFSA), where their investments can grow and generate a tax-sheltered income.

Depending on your financial objectives, your TFSA can be a savings account adapted to your needs. Since this account allows your money to generate a non-taxable income and the withdrawals and contributions are flexible, we can discuss and benefit from various options.

Whether your investment objective is short, medium or long term, we can help you determine the strategy that suits you best. The savings you build up in a TFSA can be used at any time and to achieve your varied objectives – it’s up to you!

How the TFSA works

  • A TFSA is a type of fiscally advantageous savings account that gives every Canadian 18 years old and older the possibility of investing $6,000 per year tax-free. Those wishing to open a TFSA with BMO Nesbitt Burns must have reached the age of majority in their province of residence.

  • Contrary to RRSP contributions, TFSA contributions are not deductible from your taxable income. However, the investment income (interest, dividends and capital gains) generated by a TFSA is not taxable, either annually or when withdrawn.

  • Withdrawals from a TFSA during a given year are added to the unused contribution for the following year.

  • As with an RRSP, unused contribution rights to a TFSA can be deferred indefinitely. For example, if you deposit only $3,500 in the current year, you can contribute in $8,500 the following year (i.e. the $2,500 deferred plus $6,000).

  • TFSA funds can be withdrawn tax-free at any time and for any purpose.

  • In general, a TFSA can contain the same investments as an RRSP.

  • Neither the income nor the withdrawals from a TFSA reduce your eligibility for benefits and federal tax credits based on income (e.g. old age security, child benefits, GST credit, age deduction).

  • You can give your spouse, common law partner or your adult children money that they can contribute to their own TFSA (subject to their personal contribution ceiling).
  • The revenues generated by their TFSA will not be reattributed to you.

BMO Nesbitt Burns requires that the account holders have reached the age of majority to open a TFSA; in some territories and provinces (BC, NS, NB, NL, YT, NT and NU), the age of majority is 19.