The Tax-Free Savings Account (TFSA) contribution limit has increased to $7,000 in 2025. Every year, the TFSA contribution limit is indexed to inflation and rounded to the nearest $500. For eligible Canadians who have never contributed to the TFSA since 2009, the total cumulative contribution room has increased to $102,000 by 2025.

Despite this valuable opportunity, many Canadians make costly mistakes undermining their tax-free savings potential. Here are three TFSA mistakes Canadian investors should avoid in 2025.

Holding too much cash in a TFSA

Nearly half of TFSA holders keep their savings in cash, missing significant growth opportunities. While cash provides security, holding investments like stocks, bonds, exchange-traded funds (ETFs), or mutual funds within a TFSA can generate substantially higher returns over time, all completely tax-free.

Over-contributing to your TFSA

Over-contribution remains a serious concern for 2025. Exceeding the $7,000 limit or your available contribution room triggers a harsh 1% monthly penalty on the excess amount. Unlike RRSPs (Registered Retirement Savings Plans), TFSAs offer no grace buffer, and penalties apply from the first excess dollar. The Canada Revenue Agency monitors contributions closely and will send notices demanding immediate withdrawal of excess amounts.

For example, over-contributing by $2,100 in October and leaving it uncorrected through December would result in $63 in penalties. The key is withdrawing excess contributions immediately upon discovery.

Misunderstanding withdrawal and re-contribution rules

The third mistake involves misunderstanding withdrawal rules. Money withdrawn from a TFSA cannot be re-contributed in the same calendar year without triggering over-contribution penalties. Withdrawn amounts only restore contribution room at the beginning of the following year.

Proper TFSA management requires understanding these rules, investing for growth rather than holding cash, and carefully tracking contribution limits to maximize this powerful tax-free savings vehicle.

Consider holding quality growth stocks in the TFSA

While several Canadians hold cash in the TFSA, the tax-sheltered status of the registered account makes it ideal to hold quality growth stocks such as goeasy (TSX:GSY). An investment of $1,000 in goeasy stock back in 2009 would be worth $17,000 today. The cumulative returns are closer to $27,000 if we adjust for dividend reinvestments.

Valued at a market cap of $2.4 billion, goeasy provides non-prime leasing and lending services to Canadian consumers. It offers unsecured and secured installment loans, home equity and improvements, automotive vehicle financing, and more.

Despite its outsized gains, the TSX stock trades 30% below all-time highs, allowing you to buy the dip and benefit from a forward dividend yield of 3.1%.

goeasy has increased revenue from $347.5 million in 2016 to $1.52 billion in 2024. Analysts expect revenue to grow at a compounded annual growth rate of 10.5% over the next three years. Comparatively, adjusted earnings are forecast to expand from $16.7 in 2024 to $25.6 in 2027.

goeasy stock trades at a forward price-to-earnings ratio of 7.9 times, below its 10-year historical average of 9.8 times. If GSY stock is priced at nine times forward earnings, it will trade around $240 per share in early 2027, above the current trading price of $151.

Given consensus price targets, analysts remain bullish on the TSX dividend stock and expect it to gain over 40% in the next 12 months.

The post 3 TFSA Mistakes Canadian Investors Should Avoid in 2025 appeared first on The Motley Fool Canada.

More reading

• 10% Yield: Here’s the Dividend Trap to Avoid in April
• Down Almost 82% From Its All-Time High, Is goeasy Still a Buy?

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Investing in fundamentally strong blue-chip stocks that are part of expanding addressable markets should help you deliver outsized gains over time. In this article, I have identified three Canadian blue-chip stocks you can buy right now with $30,000 and benefit from market-beating gains over the next decade. Let’s see why.

Is this blue-chip stock a good buy?

Valued at a market cap of US$118 billion, Brookfield Asset Management (TSX:BAM) is among the largest alternative asset managers in the world. The blue-chip TSX stock went public in late 2022 and is currently down 17% from all-time highs.

In the fourth quarter (Q4) of 2025, Brookfield Asset Management reported record fee-related earnings of US$677 million (US$0.42 per share), up 17% year over year, and distributable earnings of US$649 million (US$0.40 per share), up 11%. Its fee-bearing capital grew 18% to US$539 billion, driven by US$135 billion in fundraising in 2024.

Brookfield Asset Management is strategically positioned to capitalize on major investment themes, including digitalization, clean energy infrastructure, and private credit. BAM highlighted its significant opportunity in artificial intelligence (AI) and data centre infrastructure, exemplified by its recent €20 billion infrastructure investment program with France to support AI deployment.

In recognition of its strong growth outlook, BAM increased its dividend by 15% to an annualized rate of US$1.75 per share, currently offering a forward yield of 3.3%. Analysts also expect its dividend per share to increase to US$2.18 per share in 2027.

A blue-chip TSX insurance stock

Great-West Lifeco (TSX:GWO) is another blue-chip TSX stock that offers investors a yield of 4.2%. Earlier this month, the Canada-based insurance giant raised its long-term objectives, targeting a base RoE (return on equity) of +19% (up from 16%). It also introduced a new capital generation target of +80% of base earnings while it maintained its 8-10% base EPS (earnings per share) growth target and a dividend payout target ratio of roughly 50%.

Great-West highlighted its transformation over the past five years, focusing on four at-scale business segments. Each segment is targeting mid-single-digit or higher organic growth, with Empower projecting double-digit earnings increases as it expands from retirement into wealth management.

Great-West emphasized its capital-light business mix, with strong growth in retirement and wealth management expected to drive higher returns. Management also outlined $250-$300 million in post-tax transformation charges over 36 months to improve efficiency.

The insurance heavyweight highlighted its strong capital position and cash generation, providing flexibility for organic growth investments, dividend increases, and potential merger and acquisition opportunities, with a focus primarily on the U.S. retirement market.

Is this TSX stock a good buy?

The final blue-chip TSX stock on my list is WSP Global (TSX:WSP), which operates a professional services consulting firm. In the next five years, analysts expect its revenue to grow at a compound annual growth rate of 7.2%. Moreover, adjusted earnings are forecast to expand from $8.05 per share in 2024 to $12.44 per share in 2027.

In the last 10 years, WSP stock has traded at a forward price-to-earnings multiple of 23.2 times. So, if it can maintain a similar multiple, the stock will be priced at $288 per share in early 2027, above the current price of $242 per share.

Analysts remain bullish and expect the TSX stock to gain over 20% in the next 12 months.

The post How I’d Invest $30,000 in Canadian Blue-Chip Stocks to Build Serious Wealth appeared first on The Motley Fool Canada.

More reading

• This Market Feels Uncertain: Here Are 3 TSX Stocks I’d Still Buy
• Got $10,000? Here’s a Simple TFSA Plan for Income and Growth
• 5 Canadian Stocks Built to Buy and Hold for the Next 5 Years
• How Much a Typical 45-Year-Old Has in TFSA and RRSP Accounts
• The Sectors Where Canada Actually Beats the United States

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management and WSP Global. The Motley Fool has a disclosure policy.

Valued at a market cap of US$4.15 billion, Brookfield Infrastructure (TSX:BIP.UN) stock is trading 31% below its all-time highs. Despite the ongoing pullback, the TSX stock has returned 500% to shareholders since its initial public offering in late 2009. If we adjust for dividend reinvestments, cumulative returns are closer to 1,120%.

The drawdown in BIP stock has raised its dividend yield to 4.6%, making it attractive to value and income investors. So, let’s see if you should buy this TSX dividend stock for its 4.6% dividend yield.

Should you own this blue-chip TSX dividend stock?

Brookfield Infrastructure delivered a solid performance in 2024, showcasing the resilience of its globally diversified portfolio amid a challenging macroeconomic environment. In 2024, it generated funds from operations (FFO) of US$3.12 per unit, indicating a 6% year-over-year growth.

The infrastructure giant continues to deploy its capital recycling strategy effectively, securing US$2 billion in proceeds from asset sales while deploying over US$1.1 billion in growth initiatives. These investments included three tuck-in acquisitions expected to contribute more than US$150 million in incremental annual FFO.

“Our base business performed well and is more diversified today than at any point during our history, providing more resilience than ever before,” Brookfield noted in its annual report. Management highlighted that its pipeline of investment opportunities is the deepest it’s been in years.

By segment, transport emerged as the standout performer with an FFO of US$1.2 billion, representing nearly 40% growth driven mainly by the acquisition of a global intermodal logistics company. The data segment also delivered impressive growth of 21%, reaching US$333 million in FFO as digital infrastructure investments continue to pay off.

The utility segment generated US$760 million in FFO, reflecting 7% organic growth when excluding asset sales and currency effects. Meanwhile, the midstream segment delivered US$625 million in FFO with 11% comparable growth, bolstered by higher volumes across its assets, particularly in North American gas storage.

Financial markets activity was particularly notable, with Brookfield completing approximately US$10 billion in financings. This included US$8.5 billion to efficiently finance businesses and extend maturities, plus US$1.5 billion of debt repricing to reduce capital costs.

What’s next for BIP stock?

Looking ahead to 2025, Brookfield has already secured US$850 million in proceeds from asset sales in just the first month of the year. Management expressed confidence in delivering US$5-6 billion in asset sale proceeds over the next two years, citing the return of buyers for core infrastructure assets.

The company’s board approved a 6% increase in its quarterly distribution to US$0.43 per unit (US$1.72 annualized), maintaining its track record of consistent dividend growth. Distributions have increased at a 7% compound annual growth rate over the past decade, with the company targeting yearly growth of 5-9% going forward.

Brookfield Infrastructure maintains a conservative payout ratio of 67%, retaining capital to fund its robust pipeline of organic growth opportunities. In 2024, it added US$1.8 billion of new projects to its capital backlog, which is expected to deliver attractive returns as these initiatives come online.

With its globally diversified portfolio of high-quality infrastructure assets across utilities, transport, midstream, and data segments, Brookfield Infrastructure continues to deliver on its mission of generating sustainable and growing distributions for unitholders while targeting +12-15% total returns over the long term.

The post Should You Buy This TSX Dividend Stock for its 4.6% Dividend Yield? appeared first on The Motley Fool Canada.

More reading

• 2 Canadian Dividend Stocks That Could Help You Sleep Better at Night
• The Dividend Stock I Own and Have Zero Intention of Ever Selling
• 3 Impressive Dividend Stocks With Yields Reaching as High as 6.9%
• 5 Canadian Stocks I’d Feel Good About Holding for the Next 10 Years
• Canada Is Pouring Billions Into Infrastructure: Does That Make BIP Stock a Buy?

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.