Tools & Calculators / TFSA vs Non-Registered
Canada

TFSA vs Non-Registered Accounts Calculator

Compare TFSA vs non-registered investing — see the real cost of tax drag on your returns.

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Investment Details

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years
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Return & Income Type

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Your Tax Rate

TFSA Advantage After Tax
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more in your pocket over {{ yearsStr }} years
TFSA (After-Tax)
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100% yours — tax-free
Non-Registered (After-Tax)
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after annual tax + gains tax
Total Tax Lost
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to CRA in non-registered
Effective Tax Drag
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annual return lost to tax
TFSA Winner
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Total Contributed{{ contributedStr }}
Investment Growth+{{ tfsaGrowthStr }}
Tax on Growth$0
Effective Annual Return{{ tfsaEffStr }}
Non-Registered Tax Drag
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Total Contributed{{ contributedStr }}
Gross Growth+{{ grossGrowthStr }}
Annual Tax Paid−{{ annualTaxStr }}
Deferred Gains Tax−{{ cgTaxStr }}
Effective Annual Return{{ nonregEffStr }}
Effective Return: TFSA vs Non-Registered
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Non-Registered{{ nonregEffStr }}
Growth Comparison Over Time
TFSA Non-Registered
Years →
YearTFSANon-RegTax (Yr)Advantage
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How Income Type Affects Tax Drag: Interest is taxed at your full marginal rate every year — the worst case for tax drag. Eligible Canadian dividends benefit from the dividend tax credit, reducing the effective rate. Capital gains are taxed at 50% inclusion and only when you sell — deferral helps, but you still lose money at the end. In a TFSA, the income type doesn’t matter — it’s all tax-free.
Note: This calculator uses simplified tax models. Interest is taxed annually at your full marginal rate. Eligible dividends use the gross-up and credit method. Capital gains use 50% inclusion, deferred to the end. Actual results depend on your full tax situation, rebalancing, and realized gains. Investment returns are not guaranteed.

TFSA vs Non-Registered: Why the Account Type Matters

Investing the same money with the same returns in a TFSA vs a regular non-registered account produces very different outcomes — because of tax drag. In a non-registered account, the CRA taxes your investment income every year (or at sale), and that money is gone forever. It can no longer compound.

The cost of this tax drag depends on what type of income your investments generate. Interest income (from GICs, bonds, or savings accounts) is taxed at your full marginal rate every year — this is the most expensive to hold outside a TFSA. Eligible Canadian dividends get preferential treatment through the dividend tax credit, reducing the effective rate. Capital gains are the most tax-efficient — only 50% is taxable and the tax is deferred until you sell. This is why financial planners often suggest holding interest-bearing investments inside your TFSA first.

Disclaimer: This calculator uses simplified annual tax drag models. Interest is taxed at the full marginal rate annually. Eligible dividends use the gross-up and credit method (approximate). Capital gains use 50% inclusion, deferred to the end of the period. Actual results vary based on your full tax situation, portfolio turnover, and specific holdings. The 2025 capital gains inclusion rate increase to 66.7% above $250K is not modeled here. Investment returns are not guaranteed.

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