Making Sense of TFSA’s

TFSA’s – Tax Free Savings Accounts

The TFSA has to be one of Canada’s most misunderstood products.

I was out with some people for lunch the other day and one of them made the comment that there wasn’t a lot of advantage to a TFSA.  She said you can only make 1 or 2%.  I couldn’t stop myself, I had to correct the grossly bad information she was about to spread!  It was suddenly very clear that she was thinking that she could only hold a savings account inside her TFSA.

I used to hear this from people who typically dealt with banks rather than financial advisors.  When you are dealing with someone in the bank, you are not dealing with their trained advisors.  You are dealing with a clerk that has taken some training to get their license.  Typically, you need to have $100,000 or more before you are ever treated to a real advisor.  Ask them if they have their CFP designation!

What CAN you have in a TFSA?


  • Stocks
  • Bonds
  • Savings Accounts
  • More… (talk to your financial advisor)

If you can hold it in Registered Retirement Savings Plan (RRSP), then you can hold it in your TFSA.  This means the rate of return could go well beyond 1-2% depending on your stomach for risk.