International students can open a TFSA in Canada. All you need is a valid SIN number (any starting number), be at least 18 years old, and be a resident of Canada (which will be talked about in this article). Also, deposits to a TFSA account while a non-resident is subject to a 1% monthly tax until withdrawn.
TFSA (Tax-Free Savings Account) is a great way to own stocks, ETFs, and other assets since profits are tax-free. At the same time, losses on assets like stocks inside a TFSA account are not tax deductible.
TFSA accounts can be opened or closed at any time. To close a TFSA account, simply withdraw the investments and notify the investment platform when funds are withdrawn to officially close a TFSA account.
Closing an account can be done by sending an e-mail to your investing account or by calling customer support after funds are withdrawn.
Requirements to Open a TFSA
- SIN number (begins with any number)
- Be at least 18 or 19 years old (depends on the age of majority of a province)
The age of majority in some provinces is 18 years old while it is 19 years old in other provinces. For instance, the age of majority in British Columbia (BC) is 19 years old while Ontario has a minimum age of 18 years old to enter into a legal contract.
TFSA Investments
- Stocks
- ETFs
- Mutual Funds
- Bonds
- GICs
- Savings accounts
Other investments can also be held inside a TFSA account. Stocks and ETFs on US and Canadian dollars can be held in a TFSA account.
Investing Platforms for International Students in Canada
1. Wealthsimple Trade TFSA – Stocks & ETFs listed in US and Canada
You can buy or sell stocks in the United States and Canada through Wealthsimple Trade. Thousands of stocks and ETFs (Exchange Traded Funds) can be traded through Wealthsimple Trade. Also, fractional trading is available on popular stocks such as Tesla and Apple stock.
Wealthsimple offers TFSA account where stock and ETF investments can be held.
- No minimum requirement. Anyone can start with $150 or less.
- $0 commission fees on trades
- 1.50% exchange rate fee for US dollar trades
- Fractional Trading
- More than 2 Million People have a Wealthsimple account
- Best for Beginners – The platform is simple and easily understandable
Visit wealthsimple.com for more details. A TFSA account can be created with wealthsimple.com to start investing in stocks and ETFs in US and Canada inside a TFSA.
Wealthsimple Tutorial – How to Buy or Sell Stocks
2. Questrade – Stocks, ETFs, Bonds, Options, etc.
- Minimum of $1,000 to open an account
- $4.95 commission fee for every stock trade (buy or sell)
- 2% US dollar exchange rate fee
- Questrade has been operating for more than 20 years. More than 200,000 new accounts every year
- The platform is a bit more complicated than Wealthsimple Trade
Questrade – How to Buy and Sell Stocks
Advantage of TFSA
Personal/Margin and TFSA accounts offer the most flexibility since you can add or withdraw funds anytime. Also, there is no limit on the number of trades in personal and margin accounts.
| TFSA | Personal or Margin |
| Profits are Tax Free | Gains are taxable |
| Funds can be withdrawn anytime | Funds can be withdrawn anytime |
| Deposit limited up to TFSA contribution limit | No limit on the amount of deposits |
Stocks and ETFs
Stocks and ETFs in US and Canadian dollars can be owned inside a TFSA account for most TFSA self-directed accounts. Self-directed accounts enable users to buy and sell stocks and ETFs inside a TFSA account. As such, funds can also be withdrawn anytime.
Limitations of a TFSA
TFSA has a contribution limit of $6,000 each for both 2020 and 2021. The contribution limit is the maximum amount a person can deposit to TFSA accounts. TFSA had a contribution limit of $5,000 when it started on 2009. The limit adjusts for inflation every year.
Unused contribution limits are carryforward to future years. The amount of contribution limit starts when a person is eligible to open a TFSA account when the requirements are met. There is no contribution limit on years when a person is a non-resident of Canada.
Stock Investing Platforms in Canada
| Investing Platform | Commission Fees (Stock Buy or Sell Trade) |
| RBC Direct Investing | $9.95 per trade (Lower pricing of $6.95 for active traders, 150+ trades every 3 months) |
| TD Direct Investing | $9.99 per trade (Lower pricing of $7.00 for active traders, 150+ trades every 3 months) |
| Wealthsimple Trade | $0 free commission fees for CAD stocks 1.50% exchange rate fee for US stock trades |
| Questrade | Around $5 for most trades (Lower pricing available for active traders) |
Wealthsimple Tutorial – How to Trade Stocks
Questrade – How to Buy and Sell Stocks
Key Advantages of a TFSA
- Funds can be withdrawn anytime.
- Profits from any US or CAD stocks, ETF, or mutual funds inside a TFSA account are tax-free. Other investments like savings and GIC accounts can also be held inside a TFSA account.
- TFSA account can be closed at any time. Withdrawing funds takes around 2-5 days for most platforms.
Can you buy US stocks in a TFSA account?
US stocks and ETFs can be held on most TFSA accounts. US stocks are usually available to be traded upon opening an account by default on most TFSA self-directed accounts.
Is Having a Job Required to Open TFSA?
Having a job is not required to open a TFSA account. In addition to the three requirements above (above 18 years old, SIN number, Canadian resident), most platforms require an address and a bank account in Canada.
How much is the minimum Investment Required to get started?
The minimum investment ultimately depends on every investing platform. Some platforms may require at least a $1,000 deposit or more.
TFSA (Tax Free Savings Account)
- Any profit from stocks (dividends or capital gains) on TFSA are tax-free.
- Deposits to TFSA accounts are limited up to a certain contribution limit.
- Deposits above the contribution limit are subject to a 1% monthly tax by the CRA. (ex. Over contribution of $5,000 = $50 monthly penalty until withdrawn, assuming a limit of $6,000 but $11,000 is deposited on TFSA)
- Day trading on TFSA is not recommended by the CRA. TFSA is designed for medium to long-term savings.
- Deposits and withdrawals are tax-free. No limit on the number of withdrawals.
- Gains or losses would not affect the contribution limit.
TFSA Contribution Limit
- Unused contribution limit on past years does not expire
- Withdrawals are added back to the contribution limit every January 1
- Multiple TFSA accounts can be opened, but the total deposits should be below the contribution limit
- The value of investments on TFSA does not affect the contribution limit
What is the minimum deposit possible to a TFSA account?
There is no minimum amount to deposit to a TFSA account. A person can deposit only $50 or less and invest in stocks, ETFs, savings accounts, or mutual funds inside a TFSA account. However, some investing platforms may require a minimum of about $1,000 to open an account while many platforms don’t require a minimum deposit.
The total deposits on your TFSA accounts for a year must be below your Contribution Limit. CRA (Canada Revenue Agency) may charge a penalty of 1% per month on deposits above the contribution limit.
Yearly Contribution Limit Table
| Year | Contribution Limit |
| 2021 | $6,000 |
| 2020 | $6,000 |
| 2019 | $6,000 |
| 2018 | $5,500 |
| 2017 | $5,500 |
| … | … |
| 2009 | $5,000 |