A Simple Way to Turn $25,000 in TFSA Savings Into Consistent Income

Saving $25,000 can be the start of something bigger, as it could grow into a much larger nest egg over time. But once that money is sitting in the bank, a new question shows up. What should you do with it?

Leaving cash in a regular savings account feels safe. In reality, inflation quietly eats away at it every year.

But if your goal is steady income you can count on, there is a simple approach that has worked for Canadian investors over the past decade. Put that $25,000 to work inside a Tax-Free Savings Account (TFSA) and pair it with a dependable, income-paying stock.

Every dollar of dividend income earned inside a TFSA is yours to keep. One name that fits this strategy well is Enbridge (TSX:ENB), Canada’s largest energy infrastructure company.

The bull case for this TFSA dividend stock

Enbridge moves oil and natural gas across North America through an enormous pipeline network. Think of it less as an oil company and more as a toll road operator, given that it gets paid for moving energy.

Its business model enables the energy giant to benefit from steady, predictable cash flows, resulting in consistent dividend hikes. At its annual shareholder meeting in May, CEO Greg Ebel told investors the company delivered record financial results in 2025 and met or beat its financial guidance for the 20th year in a row.

The Canadian dividend stock sanctioned $14 billion in new projects last year and placed $5 billion of new assets into service. Management pointed to rising demand from data centres, LNG exports, and industrial customers as reasons the company expects steady growth well into the next decade, with a $39-billion project backlog already lined up through 2030.

What $25,000 could look like inside a TFSA

As of early July, Enbridge shares trade at around $77 on the TSX and pay an annual dividend of $3.88 per share, split into quarterly payments of $0.97 each. That works out to a dividend yield of roughly 5.1%.

Here is the simple math on a $25,000 investment.

You could buy about 326 shares. At $3.88 per share per year, that works out to roughly $1,265 in annual income. Spread across four payments, that is about $316 every three months, landing in your account without owing a cent to the CRA.

Enbridge raised its dividend for the 31st consecutive year in December 2025, by 3%. The company has guided for continued dividend growth of 3% to 5% a year going forward. Notably, ENB stock has raised the annual dividend from $0.58 per share in July 2006.

If you do not need the cash right away, reinvesting those dividends through a Dividend Reinvestment Plan buys you more shares automatically. Over time, that compounding effect can meaningfully grow both your share count and your future income.

The bear case for the Canadian dividend stock

No investment is without risk, and pipeline stocks are sensitive to interest rates, regulation, and shifts in energy demand.

Enbridge carries a fair amount of debt, though management has kept leverage within its target range and maintained a strong investment-grade credit rating.

At the same time, one shareholder at the May meeting raised concerns about a proposed pipeline project in northwestern Canada. Ebel responded that Enbridge is not currently a proponent of that project and that any future project would go through the company’s full board and risk review process, including its Sustainability Committee.

For investors focused on income rather than speculation, Enbridge’s existing contracted asset base matters most, and that part of the business looks solid.

The Foolish takeaway

Turning $25,000 into consistent income does not require picking the next hot stock or timing the market.

A TFSA paired with a proven dividend payer like Enbridge gives you a straightforward path to tax-free cash flow today, with room for that income to grow over time.