1 Ideal Way to Use Your TFSA to Double an Annual Contribution

The Canada Revenue Agency (CRA) caps the Tax-Free Savings Account (TFSA) annual contribution limits and expects users to work within them. Still, doubling the amount is possible without breaking the rules.  A legal and innovative way to double your TFSA annual contribution is through dividend reinvestment.

Data from the CRA shows that the average TFSA balance per individual is $38,566, well below the $109,000 cumulative lifetime contribution as of January 2026. Furthermore, only about 10% of eligible Canadians maximize their annual contribution limits.

Don’t be discouraged if you’re in the same boat. You can initially max out the $7,000 TFSA limit for 2026 and let it ride without making additional deposits in subsequent years due to financial constraints. An effective strategy is to purchase dividend stocks, then reinvest all dividend earnings and acquire additional shares of your current holdings.     

Dividend reinvestment allows your money to grow and double on its own, though over a longer timeframe. Future dividend hikes can shorten the compounding timeline, while stock price appreciation will increase the TFSA balance.      

Lead vehicle

A large-cap, dividend-growth stock that suits a “double-your-TFSA contribution” agenda is Enbridge (TSX:ENB). The $167.5 billion energy infrastructure giant boasts 31 consecutive years of dividend increases. At $75.91 per share, the dividend yield is 5.1%, with a quarterly payout. You can reinvest dividends four times a year.

Enbridge’s latest increase to the common share dividends was 3%. Given the plan to deploy approximately $10 billion in growth capital and the entry of new projects into service, its President and CEO, Greg Ebel, expects another year of steady and predictable growth. The company forecasts 3% distributable cash flow (DCF) per share and targets 5% annual growth post-2026.

Double your TFSA contribution

The Rule of 72 estimates the time it takes for an initial investment to double. Divide 72 by the annual yield to get the exact number of years required. With this formula, a $7,000 position, or any amount, in Enbridge will double in approximately 14.2 years. The period shortens with a higher-yielding stock, but you want to avoid a dividend trap.

Note that 14.2 years is a conservative baseline for now. Enbridge has delivered steady capital gains over the years, as evidenced by its nearly plus-1,025% two-decade total return. The projected 5% DCF growth beyond 2026 could considerably shorten the actual timeline.

High-growth option

Enbridge is a stable compounder and defensive anchor in a TFSA. However, another option to dramatically double your TFSA contribution faster is investing in a non-dividend-paying, high-growth stock like 5N Plus (TSX:VNP). It has rewarded investors with an explosive plus-1,091% return in three years.

The $3.9 billion specialty materials company produces ultra-high-purity metals and chemical compounds. VNP currently trades at $42.99 per share. Had you invested $7,000 three years ago, your money would be worth $83,360 today. However, investors must remember there’s no income safety net here. You risk permanently losing your TFSA contribution room if the stock price sinks.

Predictable path

Doubling your TFSA contribution is not rocket science. The predictable path to going beyond the prescribed limit is through an established dividend grower like Enbridge. You should have no roadblock if time isn’t a primary consideration.

The post 1 Ideal Way to Use Your TFSA to Double an Annual Contribution appeared first on The Motley Fool Canada.

Should you invest $1,000 in Enbridge right now?

Before you buy stock in Enbridge, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Enbridge wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have over $17,000!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 97%* – a market-crushing outperformance compared to 88%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { 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_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of July 6th, 2026

More reading

• Where I See Enbridge Stock Heading Over the Next 3 Years
• 2 TSX Stocks That Could Win Big From Canada’s Energy Advantage
• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market
• 2 Canadian Dividend Giants to Buy With Rates on Hold
• 1 High-Yield Dividend Stock to Buy and Hold for a Decade or More of Income

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.