Don Maycock...advising you to and through retirement!

The Smart TFSA Strategy

When to Consider Having Multiple TFSA Accounts

In a recent article, see reference below, the “report found that the average amount held in a TFSA climbed more than nine per cent to $30,921 from a year ago, December 2020. With a TFSA limit in 2020 of $69,500, this represents about 45% of the maximum limit (excluding any growth in the TFSA).  

What was a bit surprising was that “only 49 per cent saying they’re aware a TFSA can hold both cash and at least one other type of investment.  So just to be clear, you can hold quite a variety of investments including mutual funds, ETFs and stocks and bonds. For all the details follow this link to read,  “What Types of Investments are Allowed?”

As TFSAs contribution limits continue to grow each year, it might make sense to have a laddered approach to your TFSA. A ladder is simply multiple accounts, like multiple rungs on a ladder, for different goals. They can be funded using a lump sum deposit or regular contributions, also referred to as dollar cost averaging. Below is a sample of a Smart TFSA strategy using a two accounts.

Account 1: Emergency Fund Strategy

If you use your TFSA as an emergency fund, then three to six times monthly expenses is a ballpark allocation.  For example, if your monthly expenses were $2,500, then allocating between $7,500 and $15,000 in money market, a short term GIC or high interest savings account would be reasonable considerations.

Account 2: Portfolio Strategy

With the remaining amount not designated to the TFSA Emergency Fund Strategy you might consider a longer term investment such as a portfolio blend of cash, bond and equities.  If you aren’t sure what might be a suitable allocation, try the SMART TFSA Portfolio Questionnaire and receive a complimentary, no obligation sample portfolio.


With a total TFSA limit of $75,500 in 2021, TFSAs are no longer exclusively a simple savings account strategy. There are many other circumstances to make use of investing in a Smart TFSA such as (i) increased monthly cash flow (ii) down payment for the next home or car; just to name a few.

Reference Article: Cash is Canadians’ primary TFSA investment: BMO survey”, December 15, 2020.

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