The power of “tax-free” inside a Tax-Free Savings Account (TFSA) can be life-changing over a lifetime. A TFSA can save you as much as 20% in taxes on your investment income over a year. While it might not be a lot in one year, it can add up in a big way over your lifetime.
You can build a TFSA income powerhouse with even a modest amount of cash. If I had $20,000, here is how I would structure a TFSA portfolio to earn nearly $70 per month of extra passive income.
Pembina Pipeline: A top income stock for a TFSA
The first stock I would buy for my TFSA is Pembina Pipeline (TSX:PPL). Now, it doesn’t pay a monthly dividend. Nonetheless, with a 4.4% yield, a $5,000 investment in Pembina would earn $53.66 quarterly or $17.88 averaged monthly.
Pembina is sitting at the perfect intersection of a great balance sheet and multiple growth opportunities. The company provides essential energy infrastructure across Western Canada.
Pembina has a high stream of contracted income that widely supports its dividend. Over the next five years, several major projects (LNG terminals, data centre powering, ethane extraction) will lead to attractive mid-single-digit growth. Its stock recently pulled back by 6%. It’s a great time to start a position.
Granite REIT: A top REIT
Granite Real Estate Investment Trust (TSX:GRT.UN) is the next stock I’d buy for my TFSA. REITs are the perfect place to find monthly dividends. Granite yields 3.95%. A $5,000 investment would earn $16.27 monthly.
Granite just delivered a very solid quarter, where funds from operations (FFO) per unit increased by 12%. The company is projecting 6-8% FFO per unit growth for 2026.
Granite has modern logistics properties in great locations. Its steady investment strategy has continued to improve the quality of its portfolio. Its 98% occupancy is evidence of how well-run this REIT is. After a recent pullback, Granite is an attractive buy.
Propel: A fintech for a TFSA
Another stock I’d add to my TFSA is Propel Holdings (TSX:PRL). It’s a bit of a riskier play, but it also has considerably more growth than the others. It yields 3.9% today. A $5,000 investment would earn $46.92 quarterly or $15.64 monthly.
Propel provides small loans to non-prime consumers. Not only does it operate its own platform, but it also operates through smaller banks and alternative lenders.
It just delivered a solid quarter where revenue increased by 26%, and adjusted earnings per share rose by 28%. It continues to have several large markets to expand into. This is a volatile stock, so it is not for the faint of heart.
Topaz Energy: A low-risk energy stock
The last stock I would add to my TFSA is Topaz Energy (TSX:TPZ). It’s a way to get oil exposure, but without operational/production risk. It yields 4.55%. A $5,000 investment would earn $56.70 quarterly or $18.90 averaged monthly.
Topaz has a mix of energy infrastructure assets and royalty land assets. It gets a percentage of production on the royalty land. Its assets are in highly productive regions, which should support strong organic growth for the future.
Topaz has a record of regularly increasing its dividend. With a strong mix of assets, low operating costs, and a solid balance sheet, it should continue this record in the future.