A TFSA withdrawal restores your contribution room on January 1 of the following year, not the day the money comes out. Re-contribute sooner without spare room and the deposit lands against room that hasn’t returned yet, which is the classic over-contribution mistake. The rest of the system is friendlier. The 2026 TFSA dollar limit is $7,000. If you’ve been eligible every year since the program launched in 2009 and have never contributed a dollar, your cumulative contribution room is $109,000. Your personal number is almost certainly different from both, and the arithmetic for finding it takes about five minutes, which is roughly what this page will cost you.
Then there’s the part the limit pages never get to: what the room is actually worth. The best 1-year TFSA GIC on our boards pays 4.00% right now against a 2.93% big-bank posted average, as of our August 26 capture. On a maxed-out TFSA, that gap alone is four figures a year.
How contribution room accrues, year by year
Room accrues automatically. For every year you’re 18 or older, a resident of Canada, and holding a valid SIN, that year’s dollar limit gets added to your lifetime total, whether or not you’ve ever opened an account or filed a thing. There’s no application and no earned-income requirement (that’s the RRSP’s rule). The eligibility rules are the CRA’s own, set out on its TFSA page. How the TFSA, RRSP and FHSA compare is a story of its own. Nothing is use-it-or-lose-it: unused room carries forward indefinitely.
Growth doesn’t consume room. Contribute $5,000 and watch it grow to $8,000, and you’ve still used exactly $5,000 of room. The mirror image is less cheerful: if that $5,000 shrinks to $3,000, the lost room doesn’t come back. The TFSA counts what goes in the door, not what happens inside.
The annual dollar limit has moved several times since the program began. Grouped by limit:
| Years | Annual limit | Cumulative room at period end |
|---|---|---|
| 2009–2012 | $5,000 | $20,000 |
| 2013–2014 | $5,500 | $31,000 |
| 2015 | $10,000 | $41,000 |
| 2016–2018 | $5,500 | $57,500 |
| 2019–2022 | $6,000 | $81,500 |
| 2023 | $6,500 | $88,000 |
| 2024–2026 | $7,000 | $109,000 |
The cumulative column assumes you were eligible for the entire life of the program. If you turned 18 after the program started, or became a Canadian resident partway through, your count starts from your first eligible year: add up the annual limits from that year forward and ignore the earlier rows.
The room formula, the January rule, and the penalty
Your available room in any year is three additions and one running subtraction: unused room from prior years, plus this year’s dollar limit, plus last year’s withdrawals, minus this year’s contributions as you make them. The CRA lays out the same arithmetic on its page for calculating TFSA contribution room.
Worked example. Maya enters the year with $12,000 of unused room. January 1 adds the annual limit of $7,000. Last October she withdrew $3,000, and that amount comes back on January 1 too. Her room this year: $12,000 + $7,000 + $3,000 = $22,000. When she contributes $10,000 in March, she has $12,000 left for the rest of the year.
Note the January part. Withdrawals restore room, but the restoration is dated January 1 of the following year rather than the day of the withdrawal. The trap is re-contributing in the same calendar year: withdraw $5,000 in June, put $5,000 back in November, and (unless you had $5,000 of spare room sitting unused) the November deposit is an over-contribution, because the June withdrawal hasn’t come back yet. Wait until January and the same deposit is fine. Same money, same account, different month, very different letter from the CRA.
What that letter costs: contributions above your room are taxed at 1% per month of the highest excess amount in each month the excess exists. The clock is monthly, with no proration for being over only part of one. Over by $4,000 for three months is $120 in tax, which will comfortably eat anything the money earned while it sat there. The fix is unglamorous: withdraw the excess as soon as you notice it, and if it was a genuine mistake, ask the CRA in writing to waive the tax. The request itself is free, and every month the excess stays in is money gone.
Checking your real room with the CRA
Your official number lives in CRA My Account, in the TFSA section; there’s also a paper worksheet (RC343) if you’d rather run the arithmetic yourself. Two caveats about the My Account figure.
First, it’s calculated as of January 1, so it doesn’t know about anything you’ve contributed or withdrawn since. Second, it’s built from what financial institutions report, and institutions have until the end of February to report the prior year’s TFSA activity. From January until the CRA finishes processing those reports, the number on your screen can be missing months of your own history. Early in the year, treat it as a draft.
The reliable version is the one you keep yourself: a running tally of everything you’ve put in and taken out, in a note on your phone. It beats a February screenshot every time.
Put the room to work
This is the part the CRA page and the bank guides skip: room is only worth anything when it’s earning. Every rate below is Ratehunter’s own observation, the data behind our TFSA board (see how we collect this).
| Term | Best TFSA GIC on our boards | Brand | Big-bank posted average* | First-year interest on $10,000 |
|---|---|---|---|---|
| 1 year | 4.00% | Brunswick Credit Union | 2.93% | $400 |
| 2 years | 4.25% | Brunswick Credit Union | 3.06% | $425 |
| 3 years | 4.00% | Oaken Financial | 3.12% | $400 |
| 4 years | 4.05% | Oaken Financial | 3.23% | $405 |
| 5 years | 4.25% | Oaken Financial | 3.35% | $425 |
*Average of big-bank posted rates for non-registered, non-redeemable GICs at the same terms, from the same data.
Now the payoff arithmetic. A fully maxed TFSA of $109,000 in the best 1-year TFSA GIC on our boards earns about $4,360 in a year, tax-free. The same deposit at the big-bank 1-year posted average earns about $3,194. The gap is roughly $1,166 a year: the price of not comparing. Scaled down, on $10,000 the same 1-year gap is about $107 a year.
These are deposit products, so the safety question has a clean answer: bank GICs carry CDIC coverage and credit union deposits are covered provincially. The details and the limits are in our deposit insurance guide. And if you want all four tax lanes side by side rather than just the TFSA lane, the full GIC boards carry non-registered, RRSP, and FHSA too. GICs aren’t the only thing the room can hold, either; we sort the best TFSA investments by goal separately.
So: pull your real number from CRA My Account, write it down somewhere you’ll actually find it, and when you’re ready to park the money, check the current TFSA board rather than your own bank’s poster. These rates move without notice (Wealth One Bank of Canada moved eight of them on August 26 alone, by as much as 0.15 points), so set a rate alert — and let the board do the watching.
Frequently asked questions
How much TFSA contribution room do I have?
Add up the annual limits for every year since you turned 18 (or since 2009, whichever came later), subtract everything you’ve ever contributed, and add back everything you withdrew before this year. CRA My Account shows its version of this number, but it can lag early in the year, so your own records are the tiebreaker.
Does investment growth use up contribution room?
No. Room is consumed only by contributions; interest, dividends, and growth inside the account don’t touch it. The flip side is that losses don’t restore room either, which is one reason big swings hurt more inside a TFSA than outside it.
When does TFSA contribution room reset?
It doesn’t reset so much as top up. On January 1, the new year’s dollar limit is added and last year’s withdrawals are restored. There’s no deadline within the year; unused room carries forward indefinitely.
What is the TFSA over-contribution penalty?
Excess contributions are taxed at 1% per month of the highest excess amount for each month it remains in the account. The remedy is to withdraw the excess immediately, and then, if it was an honest mistake, ask the CRA to waive the tax.
Rates referenced in this article were checked against Ratehunter's data on the publication date shown above and may have changed since — the rate boards always carry the current numbers. See our editorial standards andadvertiser disclosure.