Take two savers, Joe and Jane. At the beginning of the year, Joe puts C$6,000 in an investment account earning 7% per year. Jane contributes the same amount, but to a TFSA earning 7%. They will each have C$6,420 after a year, but Jane can withdraw all C$6,420 and owe no taxes on it, whereas Joe would be taxed on the earnings of C$420.