Four in 10 young Canadians not investing TFSA funds: TD

Many young Canadians are missing out on one of the easiest ways to grow their money, according to a new survey from TD.

While 65% of Canadians hold a Tax-Free Savings Account (TFSA), four in 10 (41%) Gen Z and Millennial account-holders admit they aren’t investing the funds inside — a habit that could diminish the benefits of long-term returns.

TD found the top reasons younger Canadians aren’t investing include wanting quick access to their money (27%), feeling they haven’t saved enough to invest (22%) and lacking confidence or knowledge about investment products (22% and 19%, respectively).

"Many Canadians understand the value of saving, but fewer seem to recognize the importance of investing those savings within their TFSA," Pat Giles, Vice-President, Saving and Investing Journey at TD, said in a statement. “Even small, consistent investments can help Canadians maximize the full tax-free potential of their TFSAs.”

Confidence gap and missed opportunities

The survey, conducted by Léger with a representative sample of 1,500 Canadian adults, shows that younger Canadians are eager to invest, but uncertain about how or where to start.

Among Gen Z respondents with a TFSA, 40% said they opened it because it seemed like a simple first step, and 25% intend to begin investing within the next year. Yet two in five don’t feel confident knowing when to use a TFSA versus a Registered Retirement Savings Plan (RRSP), and one in three aren’t sure whether they’ve chosen the right account type for their financial goals.

Those who don’t yet have a TFSA cited lack of understanding as the biggest barrier — nearly three-quarters (74%) said limited knowledge was holding them back, which is well above the national average of 52%. Many also said they weren’t sure where or how to begin (35%) or found investing too complicated (16%).

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Financial literacy and early investing habits

The findings in this TD survey echo a broader trend in financial literacy across Canada.

According to a recent survey from CIBC, only about 55% of Canadians aged 18-34 say they feel confident investing, compared with 64% of those aged 55 and over. Analysts say that learning the difference between saving and investing — and understanding how tools like TFSAs can compound growth over time — is key to bridging that gap.

TD encourages Canadians to view TFSAs not just as short-term savings vehicles but as foundational investment accounts that can grow tax-free throughout their lives. The bank notes that even modest, consistent contributions can build momentum over time, especially for younger investors who have decades of compounding ahead.

“No amount is too small to start investing, and starting early can build lifelong habits that allow your money to grow,” Giles added.