You Could Receive $191.75 Monthly Tax-Free with TFSA – Check Eligibility Today
A Tax-Free Savings Account (TFSA) is one of the most valuable financial tools available to Canadians, providing a unique opportunity to build wealth without the burden of taxes.
If you’ve seen promotions like “$191.75/month free with TFSA – check if you qualify now“, it’s worth understanding how you can use your TFSA to generate passive income.
In this article, we will explain how the TFSA works, how you can use it to generate tax-free monthly income, and how to check if you qualify to take full advantage of its benefits.
What is a TFSA?
A Tax-Free Savings Account (TFSA) is a Canadian government initiative launched in 2009, designed to encourage savings and investments. It allows Canadians to earn interest, dividends, and capital gains without having to pay taxes on them.
What makes the TFSA particularly powerful is that withdrawals are tax-free, offering flexibility and freedom when accessing funds.
Unlike the RRSP (Registered Retirement Savings Plan), TFSA contributions are not tax-deductible, but the key benefit lies in its tax-free growth and withdrawals, which can significantly increase your wealth over time.
TFSA Contribution Limits and Eligibility
The government sets a limit on how much you can contribute to your TFSA annually. If you’ve been eligible to contribute since its inception in 2009, by 2025, the total contribution room can accumulate to $102,000. Here’s a quick breakdown of the contribution limits over the years:
TFSA Annual Contribution Limits
| Year | Contribution Limit |
|---|---|
| 2009–2012 | $5,000/year |
| 2013–2014 | $5,500/year |
| 2015 | $10,000 |
| 2016–2018 | $5,500/year |
| 2019–2022 | $6,000/year |
| 2023 | $6,500 |
| 2024–2025 | $7,000/year |
As of 2025, if you have been eligible since 2009, your cumulative contribution room can reach up to $102,000.
How to Generate $191.75/Month with TFSA
Many Canadians are attracted by the idea of earning tax-free monthly income with a TFSA, potentially as much as $191.75/month. Here’s how it works:
- Max out your TFSA contributions: If you’ve contributed the maximum $102,000, this gives you a solid base to start generating income.
- Invest in income-generating assets: By selecting dividend-paying stocks, ETFs, or REITs (Real Estate Investment Trusts), you can earn tax-free income.
Example of Potential Earnings
| Investment | Annual Yield | Annual Income | Monthly Income |
|---|---|---|---|
| Dividend Stock/ETF | 7% | $7,140 | $595 |
| Conservative Yield (2.25%) | 2.25% | $2,295 | $191.75 |
With higher yielding investments, you could easily surpass $191.75/month, but even more conservative yields can still provide this amount.
Steps to Start Earning $191.75/Month with TFSA
To begin earning tax-free income from your TFSA, follow these steps:
Step 1: Open a TFSA Account
You can open a TFSA with any major bank, credit union, or online brokerage (like Questrade, Wealthsimple, or RBC Direct Investing).
Step 2: Check Your Contribution Room
Visit the CRA (Canada Revenue Agency) website or use your My Account to check your available contribution room.
Step 3: Fund Your TFSA Account
Transfer cash from your savings or other investments. Be mindful of your annual limit to avoid over-contributing.
Step 4: Invest for Income
Consider income-generating investments, such as:
- Dividend stocks (e.g., Canadian banks, utilities)
- ETFs (e.g., ZWC, XDIV)
- REITs (Real Estate Investment Trusts)
- GICs or Bonds (more stable, but lower yield)
Step 5: Reinvest or Withdraw
You can either reinvest your earnings to benefit from compounding or withdraw your monthly income, entirely tax-free.
TFSA vs RRSP: Which is the Better Option for You?
Both the TFSA and the RRSP are powerful savings tools, but they serve different purposes. Here’s a quick comparison:
| Feature | TFSA | RRSP |
|---|---|---|
| Contributions | Not tax-deductible | Tax-deductible |
| Withdrawals | Tax-free | Taxable |
| Contribution Room | $7,000/year (2025) | Based on income (up to $31,560 in 2025) |
| Best For | Short- and long-term savings | Retirement savings |
The TFSA is ideal for those who want flexibility and tax-free growth, while the RRSP is better for individuals in higher income brackets seeking tax deductions.
The TFSA offers Canadians an incredible opportunity to earn tax-free income every month, potentially up to $191.75 or more depending on your investment choices and contribution room.
By following the steps to open an account, invest wisely, and manage your contributions, you can take full advantage of this powerful savings tool.
Whether you’re saving for a big purchase, retirement, or simply boosting your monthly cash flow, the TFSA is one of the best ways to achieve your financial goals.
FAQs
Can I really earn $191.75/month from my TFSA?
Yes, by investing in dividend stocks or income-generating ETFs within your TFSA, you can potentially earn this amount or more each month, depending on the amount you’ve contributed and the yields you choose.
What’s the best way to use my TFSA for long-term wealth?
Maximizing contributions, choosing high-yield investments like stocks or ETFs, and reinvesting earnings can significantly grow your wealth over time, all while remaining tax-free.
Are there any penalties for over-contributing to my TFSA?
Yes, over-contributing to your TFSA results in a 1% monthly penalty on the excess amount, so it’s important to track your contributions closely.