<P> The Tax - Free Savings Account (TFSA, French: Compte d'épargne libre d'impôt or CÉLI) is an account available in Canada and South Africa that provides tax benefits for saving . Investment income, including capital gains and dividends, earned in a TFSA is not taxed in most cases, even when withdrawn . Contributions to a TFSA are not deductible for income tax purposes, unlike contributions to a Registered Retirement Savings Plan (RRSP). </P> <P> Despite the name, a TFSA does not have to be a cash savings account . Like an RRSP, a TFSA may contain cash and / or other investments such as mutual funds, certain stocks, bonds, or Guaranteed Investment Certificates (GICs). </P> <P> The first Tax - Free Savings Account was introduced by Jim Flaherty, then Canadian federal Minister of Finance, in the 2008 federal budget . It came into effect on January 1, 2009 . </P> <P> This measure was supported by the C.D. Howe Institute, which stated; "This tax policy gem is very good news for Canadians, and Mr. Flaherty and his government deserve credit for a novel program". Furthermore, the Canadian Federation of Independent Business, Canadian Bankers Association, Bank of Montreal economist Doug Porter, the Canadian Chamber of Commerce, and the Canadian Taxpayers Federation also supported this tax policy . In 2015 South Africa introduced TFSA accounts to encourage low to middle - class citizens to save money . </P>

When did the tax free savings account start