Registered accounts such as the TFSA and the RRSP are capped: you cannot put unlimited amounts into them. But these caps do not work like a monthly allowance you lose if you do not use it — they accumulate.
How the room builds up
In a TFSA
Each year, a new amount of contribution room is added for every eligible person, whether or not the account is open. Unused room carries forward: someone who has never contributed generally has the total of every year since their first year of eligibility.
A withdrawal normally gives the equivalent room back, but only the following year. This is the point most often misunderstood: withdrawing $5,000 in March and putting it back in November of the same year can be an over-contribution if the remaining room does not cover it — and excess amounts are, as a general rule, penalized every month.
In an RRSP
Room builds differently: it depends on earned income from the previous year (a percentage, up to an annual maximum), and unused room also carries forward. Unlike the TFSA, an RRSP withdrawal usually does not give back the room that was used — it is consumed.
A neutral worked example
Suppose accumulated TFSA room of $10,000 as of January 1.
- A $6,000 contribution in February: $4,000 of room remains.
- A $3,000 withdrawal in June: the remaining room does not move this year — still $4,000.
- On the following January 1: the $3,000 withdrawn comes back, plus the new annual amount.
What this changes for your tracking
Everyfolio tracks your securities, not your contribution room: the app knows neither your other accounts nor your tax history, and therefore cannot compute your remaining room. The figure that governs is the CRA's — visible in your online account — which covers all of your accounts, across every institution.
Challenge: check my understanding
With an account, the challenge opens: four questions on this article, and a state that follows you.
Official sources
Annual amounts and carry-forward rules are set by the Canada Revenue Agency and change from year to year. Your notice of assessment and your CRA online account show your personal room. Quebec residents also file with Revenu Québec, though TFSA and RRSP room itself is administered federally.
- Canada Revenue Agency — TFSA: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account.html
- Canada Revenue Agency — RRSPs and related plans: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans.html
Informative, general content — not personalized advice. For your situation: your institution or an advisor.