A registered Canadian investment account that allows individuals to contribute up to an annual limit set by the government. Unlike an RRSP, contributions to a TFSA are not tax-deductible, but investment growth inside the account and qualifying withdrawals are generally Tax-free. Because withdrawals don't count as taxable income, a TFSA is often considered more flexible than an RRSP for money that might be needed before Retirement, though many investors use both account types over their lifetime depending on their current versus expected future tax bracket.
