There are no limitations to withdrawing funds from a TFSA. However, once you make a withdrawal, you will not re-gain your contribution room until January 1st of the following calendar year.
Every January, the CRA calculates how much you are allowed to deposit into your TFSA(s) for that year. Below is an example of how your contribution room would be affected if you made a withdrawal —
- Let's say you have maxed out your contribution room for this year and all prior years. You decide to withdraw $1,000 this year.
- The $1,000 you withdrew from your TFSA won't get added back to your contribution room this year. If you try to deposit $1,000 back into your TFSA during this year, you will have over-contributed to your TFSA. This may incur a penalty from the CRA.
- On Jan 1 of the following year, the CRA will update your contribution room to reflect that you withdrew $1000. You will now be able to contribute this $1000 back to your TFSA, in addition to that year’s newly added contribution room.
For more information about withdrawing from a TFSA, click here.
How to make a withdrawal from your TFSA
If you wish to withdraw funds from your TFSA, you can set up a withdrawal directly through your profile.