You can simplify the wealth-building process inside a Tax-Free Savings Account (TFSA) if you focus on businesses with stability, dependable earnings, strong competitive advantages, and long-term growth potential. One top Canadian stock that continues to check all those boxes is Toronto-Dominion Bank (TSX: TD).
In this article, I’ll explain why TD could be a great stock that TFSA investors can comfortably buy, hold, and never feel the need to revisit.
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TD Bank stock
Simply put, TD Bank is one of North America’s largest financial institutions, serving more than 28 million clients across its Canadian personal and commercial banking, U.S. banking, wealth management and insurance, and wholesale banking operations.
That diversification is one of TD’s biggest strengths because it helps reduce reliance on any single market or business segment. The bank generates revenue from lending, deposits, insurance, capital markets, wealth management, and everyday retail banking services.
TD stock currently trades at $156.18 per share with a market cap of about $261 billion. Over the last year, the stock has surged 67%, reflecting improving investor confidence and strong operational performance. It also offers a dividend yield of 2.8% at this market price, with quarterly payouts.
Its latest earnings report highlights strength
In the second quarter of fiscal 2026 (ended in April), the bank posted net income of $4.3 billion, compared with $11.1 billion a year earlier. At first glance, that big decline may look concerning. However, it’s important to note that last year’s reported profit was boosted by large one-time items, including the gain from the sale of Schwab shares.
On an adjusted basis, which gives a clearer view of the bank’s underlying performance, TD’s net income rose 15% year over year (YoY) to $4.2 billion. Adding to the optimism, its adjusted earnings climbed 21% YoY to $2.38 per share. That is clearly a strong result, especially for a large bank operating in a slower economic environment.
Last quarter, TD’s Canadian personal and commercial banking business delivered record second-quarter revenue and earnings. Net income in this segment rose 15% YoY to $1.9 billion with the help of higher revenue and lower provisions for credit losses.
Similarly, the bank also delivered record earnings in wealth management and insurance, where net income rose 18% from a year ago to $837 million. The segment benefited from record assets, higher insurance earned premiums, and deposit volume growth.
A reliable dividend and long-term growth opportunities
For TFSA investors, dividend income can become especially powerful because those payouts can compound tax-free over time. TD has long been known as one of Canada’s most reliable dividend-paying stocks, and its latest report added another positive signal. Notably, the bank paid dividends of $1.08 per share in the April 2026 quarter, up from $1.05 per share in the April 2025 quarter.
Meanwhile, TD’s balance sheet also remains strong as it ended the latest quarter with a Common Equity Tier 1 (CET1) capital ratio of 14.3%. This ratio is important because it shows how much high-quality capital the bank has to absorb potential losses and support future growth.
In addition, the bank continues to invest in innovation, artificial intelligence (AI), and client experience. Its wealth management business recently launched a redesigned TD Easy Trade app, while TD Insurance introduced a client-facing generative AI-powered virtual assistant. These investments could help TD improve efficiency, strengthen customer relationships, and stay competitive as banking becomes more digital.
Foolish bottom line
TD’s latest earnings report, released on May 28, clearly shows a bank with improving operating momentum and strengthening fundamentals. Its adjusted earnings rose, several business segments delivered record results, capital levels remained strong, and the bank showed confidence through a dividend increase and ongoing buybacks.
For TFSA investors, that combination is really attractive. That’s why TD stock continues to look like one of the strongest choices on the TSX today.
