Lots of investment platforms lump together new deposits and investment returns.
So if you just opened your TFSA last year, popped in $5k to start, then deposited another $5k this year, all of a sudden your account might tell you that you’re up over 100%. Woot!
Only that number isn’t about how well your investments are doing. It’s just that you added more money to your account.
Two important things here:
The first is that you should pay attention to these details when you’re evaluating how well your investments are doing. Usually you can switch to a portfolio view of some kind that will help you separate out how much growth came from new deposits and how much came from increases in the value of your investments.
And the second thing to note is that, especially in the early years, new deposits will account for a lot of the growth in your account.
Which is exactly why it’s so important to focus on consistently saving at a high rate. That’s what matters most, makes the biggest difference, and is the part of the equation you have the most control over.