Summary: 2024 TFSA Contribution Limit Announced
The Canada Revenue Agency (CRA) has officially announced the TFSA (Tax-Free Savings Account) contribution limit for 2024. The new limit for 2024 is set at $7,000, reflecting an increase from $6,500 in 2023 and $6,000 in 2022. The adjustment marks a milestone for the TFSA, as it represents the first instance of back-to-back annual increases in the TFSA limit since the inception of this registered account.
What is a TFSA?
The name “Tax-Free Savings Account” sort of gives it away, but in reality a TFSA is so much more than just a regular savings account. In a regular savings account, you are earning interest at the bank provided rate, whereas a TFSA allows you to select a basket of financial instruments to generate tax-free growth on the money held in your TFSA. Some examples of what you can hold in your TFSA include: stocks, exchange traded funds, index funds, bonds, guaranteed investment certificates and cash savings.
TFSA Contributions (including 2024 TFSA)
The amount of money that you can contribute to your TFSA is limited each year and there is a specific contribution limit from 2009 onward, as TFSAs were first introduced in 2009 by the Canadian government.
With this TFSA contribution limit announcement, the total contribution room available in 2024 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $95,000.
Here is the contribution limit for each year since the TFSA was introduced:
| 2009 | $5,000 |
| 2010 | $5,000 |
| 2011 | $5,000 |
| 2012 | $5,000 |
| 2013 | $5,500 |
| 2014 | $5,500 |
| 2015 | $10,000 |
| 2016 | $5,500 |
| 2017 | $5,500 |
| 2018 | $5,500 |
| 2019 | $6,000 |
| 2020 | $6,000 |
| 2021 | $6,000 |
| 2022 | $6,000 |
| 2023 | $6,500 |
| 2024 | $7,000 |
Your contribution room accumulates beginning in the year in which you turned 18. For example, if you turned 18 in 2015, you would have a TFSA contribution limit of $64,000 (this includes the 2024 contribution limit and assumes that you haven’t contributed yet!).
If you accidentally over contribute to your TFSA, 1% of the excess contribution will be charged to you as a penalty, which will accrue every month until the over contribution is withdrawn. Although a 1% penalty might not seem like a lot, it adds up quickly when it’s eating at the savings or investments that you’re trying to grow. A good way to avoid this is by keeping track of your TFSA contribution room by checking your CRA My Account.
Benefits of a TFSA
The biggest benefit is that earnings in your TFSA are tax-free. When you contribute to a TFSA, you don’t receive an up front tax break like you do with an RRSP, but you will receive big breaks in the future, as your investments (stocks, bonds, etc.) and the gains you earn on those investments will not be subject to any taxes.
To learn more about TFSAs, check out our article on Understanding TFSAs. If you already have a TFSA and want to maximize your investments, check out our article on TFSA Investment Options and Strategies.
