TFSA is the worst naming decision in Canadian finance
TFSALearningOpinion Piece

TFSA is the worst naming decision in Canadian finance

By Ali Hamie•2/19/2026

The Canadian government named the most powerful wealth-building tool in the country after the least productive thing you can do with your money.


A TFSA stands for Tax-Free Savings Account. Calling it a "savings account" is like calling a modern smartphone a "portable calculator." It is technically true, but you are missing the point by a catastrophic margin. The government gave us a financial superweapon and slapped a label on it that puts people to sleep. Incredible work.

The Problem


Because of this terrible branding, millions of smart Canadians treat the TFSA exactly like the Big Five banking oligopoly wants them to: as a glorified piggy bank. You transfer a few hundred bucks in, the bank pays you a microscopic 1.5% interest rate, and you pat yourself on the back for being financially responsible.

Meanwhile, inflation is quietly eating your purchasing power alive. Your money is slowly bleeding out in a tax-free environment. Leaving cash in a TFSA is like buying a high-end server just to run Microsoft Notepad. It works, but it's a massive waste of potential.

Post content


The Insight


Let’s patch this naming bug right now. Mentally rename it to a TFIA: a Tax-Free Investment Account.

A TFSA is not a product, it is a container. Think of it like a protective Tupperware box for your assets. You don't have to just put cash in the box. You can fill that box with actual investment like stocks, bonds, or Index Funds. (An Index Fund is simply a pre-packaged basket of hundreds of different stocks, meaning you don't have to guess which single company will survive the decade.)

When the investments inside this protective container grow and pay out dividends, the Canada Revenue Agency gets exactly zero dollars.

If you just leave money in cash, it dies quietly. If you invest it in the broader market, historically it grows at an average of 7% to 10% a year over the long run. Thanks to compounding interest, the difference between "saving" and "investing" over a few decades is hundreds of thousands of dollars.

Post content




What To Actually Do


If your first thought is, "I don't know how to trade stocks," that is the best part. You shouldn't be trading stocks anyway. You just need to automate the boring stuff.

  • Step 1: Escape your bank. Stop using the expensive mutual fund traps at the big banks. Open a free, self-directed TFSA with a modern platform like Wealthsimple or Questrade. It takes five minutes and you can do it on your phone.
  • Step 2: Know your limits. Log into your CRA portal to check your exact TFSA contribution limit. Do not guess this number, or the CRA will fine you 1% per month on the overage.
  • Step 3: Buy the whole market. Look for an all-in-one ETF (Exchange Traded Fund). This is a single ticker symbol that automatically spreads your money across thousands of global companies. You buy one thing, and your portfolio is instantly diversified.
  • Step 4: Automate the system. Set up a recurring deposit every payday. Set it to auto-buy your chosen ETF. Close the app and go outside.
Post content


Stop saving your money and start actually investing it, before inflation turns your tax-free cash into expensive confetti.

---

Disclaimer: I write code and complain about broken systems for a living. I am not your fiduciary, your accountant, or your financial planner. This is education, not specific financial advice. If you blindly push to production with your life savings without checking your own CRA account limits, that is a user error.*