The Best Dividend Stocks for a TFSA Right Now

Three Canadian dividend payers can help turn TFSA room into tax-free income without chasing the riskiest yields.

Amy Legate-Wolfe

Author Bio 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. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy 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. Social Media 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 30, 9:30 pm EDT

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Key Points

A Tax-Free Savings Account (TFSA) is built for income that doesn’t get taxed. That’s why dividend stocks can work so well inside one. The 2026 contribution limit is $7,000, and even a modest yield can turn that room into a steady stream of tax-free cash. The trick is not just chasing the biggest payout. It’s finding businesses with enough cash flow, demand, and discipline to keep paying.

Three Canadian dividend stocks that look attractive for a TFSA right now are IGM Financial (TSX: IGM), Chartwell Retirement Residences (TSX: CSH.UN), and Killam Apartment REIT (TSX: KMP.UN). So let’s get right into it.

Concept of rent, search, purchase real estate, REIT — Source: Getty Images

IGM

IGM is the financial-income pick. The company owns major wealth and asset-management businesses, including IG Wealth Management and Mackenzie Investments. That gives investors exposure to Canadians saving, investing, planning for retirement, and using advice over long periods.

The dividend looks appealing. IGM raised its quarterly dividend to $0.62 per share earlier in 2026. That works out to $2.48 annually, yielding 3.2%. That gives TFSA investors meaningful income without reaching into the highest-risk part of the market.

The business also has scale. IGM reported assets under management including strategic investments of $423.6 billion at the end of the first quarter. That’s the number that makes the opportunity feel real. A company managing hundreds of billions of dollars can produce recurring fees, earnings, and capital returns when markets co-operate.

CSH

Chartwell is the seniors-housing pick. This is Canada’s largest retirement-residence operator, and its business connects to one of the strongest demographic themes in the country. Canada is aging, and demand for retirement living, assisted living, and support services should keep growing over time.

Chartwell pays monthly, which makes it especially useful for TFSA investors building passive income. The current monthly distribution is just over $0.05 per unit, or roughly $0.62 annually, yielding about 2.9%. So this isn’t a high-yield real estate investment trust (REIT), but more of a recovery and income stock.

The recovery is the story. In the first quarter of 2026, Chartwell’s same-property adjusted net operating income rose 15.6%, while funds from operations per unit climbed 35%. That growth came from better occupancy and stronger execution. If occupancy keeps improving, the monthly distribution could become more attractive returns over time.

KMP

Killam Apartment REIT rounds out the group with rental housing. Killam owns apartments, manufactured home communities, and commercial properties, mostly in Atlantic Canada, Ontario, Alberta, and British Columbia. Apartments remain one of the simplest long-term income themes in Canada because people need places to live.

Killam pays $0.06 per unit each month, or $0.72 annually coming to a yield around 3.9% at writing. That monthly payout can be reinvested inside a TFSA, helping investors slowly build more income without triggering tax.

The payout also looks reasonably supported. In the first quarter, Killam earned adjusted funds from operations of $0.24 per unit, up 4.3% from last year. Its rolling 12-month adjusted funds from operations (AFFO) payout ratio improved to 68%, down from 70% a year earlier. Killam’s properties serve a durable need, and rental demand remains a powerful long-term tailwind.

Bottom line

Together, these three dividend stocks offer a useful TFSA mix. IGM brings financial income and market upside. Chartwell adds monthly income tied to Canada’s aging population. Killam adds monthly rental-housing cash flow. Each pays investors while they wait, and each is tied to a long-term theme that should outlast the next market cycle. Even $7,000 can create immense income among dividend stocks.