How to Invest $21,000 Across Three Years of TFSA Contributions

If you’re hoping to gain some growth in the future, these three are top options.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published June 27, 2025 4:30 pm EDT

When you’ve got $21,000 to invest in your Tax-Free Savings Account (TFSA) across three years, it’s tempting to rush and pick the hottest stock on the market. But the smarter move is to choose a balanced trio that offers growth, income, and resilience. With $7,000 invested each year, you can gradually build a portfolio that thrives in different economic environments. A great way to do that is by focusing on three strong TSX stocks like Canadian Apartment Properties REIT (TSX:CAR.UN), Kinaxis (TSX:KXS), and Dollarama (TSX:DOL). Let’s get into why.

Piggy bank with word TFSA for tax-free savings accounts. — Source: Getty Images

CAPREIT

Start with Canadian Apartment Properties REIT, known as CAPREIT. This real estate investment trust (REIT) owns more than 63,000 rental suites and manufactured housing sites across Canada and Europe. It’s one of the most established residential landlords in the country. The reason this Canadian stock makes sense for a TFSA is because it pays a steady monthly distribution, with a current yield of around 3.5%. That cash comes in regularly and, when inside a TFSA, it’s tax-free. It’s perfect for investors who want some predictable income as they build up their account.

CAPREIT recently reported revenue of $284 million for the first quarter of 2025, up modestly from last year. Occupancy rates remain high, sitting around 98%. Funds from operations (FFO), a key measure for REITs, increased slightly year-over-year, which shows that the trust is managing well despite a higher interest rate environment. While rising rates do create headwinds for real estate, the need for affordable rental housing hasn’t gone away. This REIT owns well-located properties and maintains a conservative payout ratio, which makes it a reliable pick for long-term investors.

Kinaxis

Next, Kinaxis is where growth enters the picture. This software company helps global firms manage their supply chains through its cloud-based RapidResponse platform. Its clients include big names in pharmaceuticals, automotive, and electronics. Unlike many tech firms, Kinaxis is profitable and continues to grow at a solid pace. Its most recent earnings showed revenue of $191 million in the first quarter of 2025, up 20% year over year. Earnings per share (EPS) hit $1.26, comfortably beating analyst expectations.

What makes Kinaxis attractive is that it operates in a niche with increasing demand. Companies want better control over their supply chains, especially after the disruptions of the last few years. Kinaxis offers real-time solutions that help them forecast and adjust quickly. It doesn’t pay a dividend, but it generates strong free cash flow and reinvests it back into the business. For a TFSA, Kinaxis is a solid bet on long-term tech growth, and because it’s a Canadian stock, you won’t face any withholding tax on capital gains inside your account.

Dollarama

Finally, Dollarama brings consistency and defensive strength. When people look to cut costs, they head to dollar stores. Dollarama continues to benefit from that trend. The Canadian stock reported revenue of $1.5 billion in its most recent quarter, up 8.2% from the same time last year. It also delivered EPS of $0.98, beating expectations and showing it’s still growing even in a tight economy.

Dollarama doesn’t offer much in dividends, but its stock price has been steadily rising. It’s up over 35% so far this year and continues to expand its store network across Canada. With inflation putting pressure on wallets, more people are turning to discount retailers, which supports Dollarama’s growth story. It’s the kind of Canadian stock that keeps performing through good times and bad.

Bottom line

If you were to invest $7,000 each year over three years, one approach could be to start with CAR.UN for income, then move into Kinaxis for growth, and wrap up with Dollarama for stability. This way, your TFSA becomes a well-rounded portfolio. You’ll have income rolling in, capital appreciation potential, and a defensive stock that does well when the economy slows down.

By the end of the third year, you’ll have a tax-free portfolio of $21,000 split across three quality names. It’s a simple plan, but one that puts your money to work with balance and confidence. That’s what smart investing in a TFSA is all about.