How to Build a $50,000 TFSA That Pays You Consistently

These two monthly-paying dividend stocks are ideal for your TFSA to boost your tax-free passive income.

Key Points
  • Investing in monthly dividend-paying stocks like RioCan REIT and Whitecap Resources can generate substantial passive income, delivering over $220 per month from a $50,000 investment when held in a TFSA for tax-free earnings.
  • RioCan's robust retail portfolio and strategic asset management, coupled with Whitecap's strong resource base and operational synergies, provide solid foundations for sustained dividends and long-term growth, making them appealing choices for income-focused investors.

In today’s uncertain environment — shaped by rising geopolitical tensions, persistent inflation, and workforce reductions driven by accelerating AI adoption — building passive income has become increasingly essential. Beyond offering financial stability, passive income can also serve as an effective hedge against inflation. Moreover, reinvesting steady payouts allows investors to harness compounding, thereby enhancing long-term returns.

One of the simplest and most cost-effective ways to generate passive income is to invest in high-quality monthly dividend stocks. By allocating $50,000 evenly across the following two Canadian companies, investors could generate more than $220 in monthly dividend income. Additionally, holding these investments in a Tax-Free Savings Account (TFSA) enables investors to earn this income tax-free.

COMPANYRECENT PRICENUMBER OF SHARESINVESTMENTDIVIDENDTOTAL PAYOUTFREQUENCY
REI.UN$20.151,240$24,986.00$0.0965$119.66Monthly
WCP$14.611,711$24997.71$0.0608$103.03Monthly
Total$223.7Monthly

With this in mind, let’s take a closer look at these two monthly dividend-paying stocks.

pumpjack on prairie in alberta canada

Source: Getty Images

RioCan Real Estate Investment Trust

Real estate investment trusts (REITs) are particularly attractive to income-focused investors because they are mandated to distribute at least 90% of their taxable income as dividends. With that in mind, RioCan Real Estate Investment Trust (TSX: REI.UN) stands out as a compelling option. The REIT owns and operates 168 properties, comprising approximately 31 million square feet of net leasable area, with most assets strategically located in Canada’s major urban markets.

RioCan also benefits from a well-diversified tenant base, with no single tenant contributing more than 5% of total revenue. Supported by its retail-focused portfolio, the REIT reported a strong 97.8% occupancy rate at year-end 2025.

In addition, the supply of new retail space remains historically low due to elevated construction costs, which is helping sustain demand for existing properties — an encouraging trend for RioCan. The company also plans to recycle between $1.3 billion and $1.4 billion this year, primarily generated through RioCan Living sales and condo proceeds.

Combined with its expansion initiatives, growth in same-property net operating income, favourable leasing spreads on renewals, and consistently high occupancy levels, these factors could support RioCan’s financial performance in the years ahead. Management anticipates diluted core FFO (funds from operations) to grow at an annualized rate of 3.5% through 2028, reinforcing the sustainability of its dividend payouts. Currently, RioCan pays a monthly distribution of $0.0965 per unit, yielding approximately 5.7%.

Whitecap Resources

Another attractive monthly dividend stock to consider right now is Whitecap Resources (TSX: WCP), which operates oil and natural gas-producing assets across Western Canada. While crude oil and natural gas prices have moderated from their recent highs following the announcement of a ceasefire involving Israel, Iran, and the United States, they remain relatively elevated — continuing to support producers like Whitecap.

The company also boasts a strong resource base, with proven reserves of 2.2 billion barrels of oil equivalent, representing a reserve life index of more than 16 years. In addition, Whitecap has enhanced its production profile through its merger with Veren and plans to invest between $2 billion and $2.1 billion this year to boost its output.

At the same time, the ongoing integration of Whitecap and Veren’s assets is already delivering meaningful synergies, with annualized cost savings of around $300 million — roughly 43% higher than initial expectations. Supported by these operational improvements and growth initiatives, Whitecap appears well-positioned to sustain its dividend payouts.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Whitecap Resources. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Got $10,000 to Invest? Here’s How You Could Split It Between Your TFSA and RRSP

Learn how to wisely invest $10,000 in your TFSA and RRSP. Understand contribution limits and tax implications for optimal growth.

Read more »

woman stares at chocolate layer cake
Dividend Stocks

How to Make Your Retirement Savings Last Longer

Retirement savings can last longer with proper fund management, a well-structured withdrawal strategy, and controlled spending.

Read more »

Map of Canada showing connectivity
Dividend Stocks

I’d Wait for TELUS’s Next Update Before Touching the Stock

Don't touch TELUS stock until you evaluate these items in its upcoming quarterly report in November.

Read more »

Printing canadian dollar bills on a print machine
Dividend Stocks

How to Convert $20,000 in a TFSA Into a Money-Making Machine

Turn $10,000 in your TFSA into tax free income with Enbridge, Fortis and CN Rail. See the yields, the math…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Dividend Income in a TFSA: Why Canadians Like This Setup

Together, these dividend-paying businesses offer Canadians a great way to pair recurring income with future growth potential.

Read more »

some investments are riskier than others
Dividend Stocks

A 7% Dividend Stock Paying Monthly Cash

SmartCentres produces about $117 monthly from a $20,000 budget, backed by high occupancy but exposed to property and financing risks.

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Dividend Stocks

AI Could Make This Software Stock More Essential

More capable AI creates a stronger need for the information controls OpenText already provides.

Read more »

Traffic jam with rows of slow cars
Dividend Stocks

A 6.8% Monthly Dividend Stock: About $113 a Month on $20,000

With a resilient business model, opportunities to expand the portfolio, an attractive valuation, and a high distribution yield, Automotive Properties…

Read more »