A TFSA Pick Yielding 6.9% With Dependable Cash Payments

A TD Bank survey found that most Gen Zs and millennials are using a Tax-Free Savings Account (TFSA) to park their money for later use. They are not investing that money, and one of the reasons is that they don’t know where to invest, and some assume they don’t have sufficient funds to invest. This article will clear that confusion and help you make the right TFSA investment choice for a dependable cash payment.

Clearing the confusion around savings vs. investing in a TFSA

We get that confusion, that is, why many Canadians mistake a TFSA for a bank savings account. But a TFSA is actually an account for long-term investing. Not just any investments, but those that give high capital growth and high yield. This is because whatever income or capital gain you earn in the TFSA, you don’t have to report it to the Canada Revenue Agency (CRA).

The limitation is that there is a contribution limit, which you can check in your My CRA Account. For 2026, you can invest $7,000. And remember, if you withdraw the money, it won’t be added to your contribution room until the next tax year.

That’s because the TFSA contribution is updated only once a year, and that is on January 1. Suppose you invest $7,000 and withdraw $5,000 in 2026. If you reinvest $5,000, that will be counted as an overcontribution. You will have to wait until January 1, 2027 for that $5,000 to be updated in your contribution room. Thus, we said at the start of the article that a TFSA is a long-term investment account.

An ideal TFSA pick for cash payments

If you are looking to earn a fixed amount every month, SmartCentres REIT (TSX:SRU.UN) is an ideal TFSA pick for its 6.9% yield. The REIT earns money from rental income, and its largest tenant is Walmart. Walmart is not just a grocer but also an anchor that attracts other retailers and households.

SmartCenters has a pretty significant intensification program ongoing to convert its shopping centres to city centres, which have everything from offices to shops, residents, and storage rooms. These city centres are strategically located at the crossroads to make them accessible to shoppers in a wider circumference.

From a dividend standpoint, 23% of the rental income from Walmart creates a dependable cash flow. The Walmart-anchored stores are also essential retail tenants, and most of their tenants have high creditworthiness. Over the last 21 years, SmartCentres has never slashed its dividend. It has grown dividends in 10 out of those 21 years.

How to maximize cash payments from the 6.9% yield

You need not limit your TFSA cash payments to the 6.9% yield. If you don’t need those cash payments urgently, you can use those monthly payouts to buy more dividend stocks or more units of SmartCenters REIT.

Suppose you invest $5,000 in SmartCenters REIT, you can earn $28.67 in monthly dividends. There are several REITs and energy stocks, like Freehold Royalties, available under $25, which you can keep buying. That way, you can compound your returns.

Investor takeaway

The TFSA is not just a savings account — it’s a tax‑free investment vehicle. By choosing dependable dividend stocks like SmartCentres REIT, you can generate monthly income, reinvest for compounding, and maximize your wealth over time. For Gen Zs and millennials, using the TFSA wisely can bridge the gap between savings and true financial independence

The post A TFSA Pick Yielding 6.9% With Dependable Cash Payments appeared first on The Motley Fool Canada.

Should you invest $1,000 in SmartCentres Real Estate Investment Trust right now?

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 10 percentage points.*

They revealed what they believe are 10 TSX Stocks for 2026… and SmartCentres Real Estate Investment Trust made the list – but there are 9 other stocks you may be overlooking.

Don’t miss out on our Top 10 TSX Stocks for 2026, available when you join our mailing list!

Get the 10 stocks instantly #start_btn5 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn5 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn5 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn5 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of March 24th, 2026

More reading

• 4 Dividend Stocks to Double Up on Right Now
• Got $10,000? This Dividend Stock Could Deliver $57.60 a Month in Passive Income
• 2 Safer, High-Yield Dividend Stocks for Canadian Retirees
• The Best Stocks to Invest $5,000 in Right Now
• Invest $45,000 in This Dividend Stock for $250 in Monthly Passive Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned.  The Motley Fool recommends SmartCentres Real Estate Investment Trust, Walmart, and Freehold Royalties. The Motley Fool has a disclosure policy.