I have a TFSA account to which I have contributed 5000 yearly since past 3 years. Now in emergency, I need to withdraw some money. What are the penalties (if any) I am looking at?

Thank you

EDIT: My tax advisor says that you can withdraw only one time / yr without penalty. More than once, and there will be penalty

  • What type of TFSA account is it? Savings, mutual fund, SD? In general TFSAs don't have withdrawal penalties, but certain products within a TFSA account (e.g. DSC or back-end load mutual funds) might have withdrawal fees.
    – fideli
    Commented May 26, 2011 at 4:55

3 Answers 3


There is a whole pile of information on TFSAs here. I recommend reading it.

There is no penalty for withdrawing money from a TFSA as such. You can withdraw from it at any time. The only restriction is that you can't put the money you took out back in the same year (unless you have sufficient contribution room for it to be considered an additional contribution). This scenario explains it.

There may be penalties for withdrawing money from the investment vehicle into which you paid the TFSA contents. For example your TFSA contents may be in a mutual fund, or in an interest-bearing savings account. If those have restrictions on how much you can withdraw, or have penalties for withdrawl, then you will have to abide by the rules and pay any penalties.


I heard some financial institution ask for $25 withdrawal fees on TFSA. Watch out for it. TD told me. I will doublecheck. RBC do not charge withdrawal fees. I will check that too.

  • 1
    Welcome to Money.StackExchange.com elvis! Can you tell us what you mean by "TD"?
    – C. Ross
    Commented Nov 19, 2012 at 13:34
  • 3
    Probably Toronto Dominion bank, usually known as TD. Commented Oct 9, 2013 at 15:07

It is my understanding that there are no penalties for withdrawals and you can withdraw as much as you want as often as you want, including more than once in the same calendar year. Of course, the money must be in cash in the TFSA, which may require you to sell something. That sale may have fees associated with it and possibly penalties for early withdrawal, etc.

There is still huge confusion over this, because there are penalties for over-contributions in the calendar year. You contribution limit is still $5,500/year, regardless of how much you may have withdrawn in that same calendar year.

So if you withdraw $10K in 2013, you can still only contribute $5,500 in 2013. In 2014, you can contribute $5,500, PLUS you can also contribute an additional $10K for the 2013 withdrawal of $10K. Think of it like 2 separate limits, one for current year, and one a running total of all past withdrawals.

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