How to Use a TFSA to Generate $300 in Monthly Tax-Free Income

By Aditya Raghunath at The Motley Fool Canada

Most Canadian investors are used to quarterly dividend payments. While these payouts are predictable, it rarely lines up with rent, groceries, or a mortgage payment that shows up every single month.

However, a handful of TSX companies pay monthly instead of quarterly. Put a few of them inside a Tax-Free Savings Account (TFSA), and you can build a real paycheck that the Canada Revenue Agency can never touch.

Here is how three well-known Canadian monthly payers, Choice Properties REIT (TSX:CHP.UN), Granite REIT (TSX:GRT.UN), and Exchange Income (TSX:EIF), could combine to deliver about $300 a month. Let’s see how.

Why monthly payers make sense for a TFSA

A TFSA shelters your investments from taxes. Pairing that with monthly dividend stocks means the shelter and the schedule work together. You are not waiting three months between checks, and you get paid the same way you pay your bills.

Choice Properties owns roughly 700 properties across Canada, most of them grocery-anchored retail centers tied closely to Loblaw, its largest tenant.

Granite REIT is a logistics and warehouse landlord with properties across North America and Europe, benefiting from e-commerce and data center demand.

Exchange Income is a diversified operator of regional airlines, medevac services, and manufacturing businesses.

The numbers behind a $300 monthly TFSA income

Let’s look at what each company is paying right now, based on the latest declared distributions.

• Choice Properties currently distributes about $0.065 per unit monthly, or $0.78 annualized, at a unit price near $16.60. That works out to a yield close to 5%. On its most recent call, CEO Rael Diamond confirmed the trust just announced its fourth consecutive annual distribution increase, supported by 98.2% occupancy and steady funds from operations growth.
• Granite REIT pays $0.2958 per unit per month, or $3.55 per year, at a unit price of around $97. That is a yield near 3.6%. CEO Kevan Gorrie told unitholders that 2025 marked Granite’s 15th straight annual distribution increase, with an AFFO (adjusted funds from operations) payout ratio of just 65%, among the more conservative in the real estate investment trust sector.
• Exchange Income pays $0.23 per month, or $2.76 annually, at a share price near $133, for a yield of about 2.1%. It is the smallest of the three yields, but CEO Mike Pyle pointed out on the company’s annual meeting call that EIC has raised its dividend 18 times since 2004 and has paid out more than $1 billion in total dividends. Moreover, its adjusted earnings payout ratio recently dropped to 67%, the lowest in company history.

Blend those three yields together, and you get an average close to 3.4%. To generate $3,600 a year, or $300 a month, you would need to invest roughly $106,000 spread across the three names. That fits within the $109,000 lifetime TFSA limit available to anyone who has been eligible to contribute since 2009.

My take: A buy for income, with one caveat

I like this trio of monthly dividend stocks as a core TFSA income sleeve.

• Choice Properties gives you defensive, grocery-backed cash flow.
• Granite gives you exposure to industrial and logistics real estate, backed by one of the sector’s best balance sheets.
• Exchange Income adds a growth kicker, with management guiding to adjusted earnings before interest, tax, depreciation, and amortization near the top of its $825 million to $875 million range for 2026, up sharply from $750 million in 2025.

Exchange Income’s lower yield means you need more capital there to hit your income target, so investors chasing pure yield may prefer to overweight Choice Properties and Granite instead, both of which currently deliver higher income per dollar invested.

Alternatively, distributions can be cut, as real estate values move with interest rates, and Exchange Income’s growth depends on continued execution on contracts like its recent Canadian North and medevac expansions.

Always confirm current prices and payout ratios before buying, since both change regularly.

The post How to Use a TFSA to Generate $300 in Monthly Tax-Free Income appeared first on The Motley Fool Canada.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.

2026