TFSA Income Investors: 3 Stocks With a +5% Monthly Payout

The TFSA (Tax-Free Savings Account) is really the ideal registered account for investors who want to earn income. When you earn income in the account, it is completely tax-free. Likewise, when you withdraw your capital, it is completely tax-free. This retirement account provides investors with a lot of flexibility for earning tax-free income.

Earn tax-free monthly income with your TFSA

There are some points to keep in mind. First, if you do withdraw any capital, you will lose that contribution space for the rest of the year. If you need to make regular withdrawals of income, make sure to keep a log of those withdrawals.

Second, the CRA (Canada Revenue Agency) puts the onus on investors to not over-contribute in any year. Make sure that if you withdraw, you don’t recontribute the amount you withdrew in that year.

Fortunately, you can recontribute in the next calendar year. So be free to withdraw, but keep track if you plan to contribute to your TFSA later in the year.

If you are looking for some investments that do pay regular monthly income in your TFSA, there are not many to choose from. Most stocks pay quarterly. However, I have you covered with three top monthly dividend stocks that pay a 5% yield or better.

Dream Industrial for steady monthly income

The first TFSA stock for monthly income is Dream Industrial Real Estate Investment Trust (TSX: DIR.UN). It pays a $0.0583 per unit monthly distribution. That equates to a 5.7% yield today. A $7,000 investment would earn $33.11 of tax-free monthly income inside your TFSA.

Dream Industrial owns and manages 73 million square feet of multi-tenanted industrial properties across Canada, the U.S., and Europe. It has a wide array of tenants and limited exposure to a single large tenant. Occupancy sits at 94.5%, but that has been improving over the year.

This stock trades at a serious discount to other industrial REITs. It has many levers to drive cash flow growth in the years ahead. Dream is a solid bet for monthly income in a TFSA.

BSR for exposure to U.S. sunbelt markets

BSR Real Estate Investment Trust (TSX:HOM.UN) is an interesting way to get exposure to the U.S. market. It operates 26 resort-style apartment complexes across the U.S. sunbelt.

BSR has been recycling older assets to buy newer, better-located properties in fast-growing Texas markets. It will take a few quarters, but investors should see good cash flow upside as it stabilizes occupancy at recent acquisitions.

Its stock is down this year, but it is incredibly cheap. HOM.UN yields 5% right now. A $7,000 investment would earn $28.70 every month.

Choice is a safe, consistent REIT for a TFSA

Choice Properties Real Estate Investment Trust (TSX: CHP.UN) is Canada’s largest REIT. It operates over 700 properties across Canada. Fifty-seven percent of its properties are anchored by various Loblaws entities.

It is a very defensive REIT. Groceries are an essential service. Its anchor tenant has been delivering excellent results, and Choice is a beneficiary of its long-term growth plans.

Occupancy is sitting at 98%. The REIT benefits from steady, low single-digit rental rate growth. Since 2023, it has raised its monthly distribution every year.

CHP.UN yields 5.1%. A $7,000 investment in your TFSA would earn $29.96 monthly.

The Foolish takeaway

A $7,000 investment in each of Dream, BSR, and Choice would earn a combined $91.77 every month or $1,101.24 annually. By using the TFSA, you get to keep all of that income and none of it heads to the CRA. Count that for a win!

Prices as of November 24, 2025