The 7 Best US Stocks to Hold in a TFSA for 2026 (and the Withholding Tax Trap Most Canadians Miss)
The best US stocks for a TFSA are low or zero dividend growth companies. A TFSA shelters your capital gains completely, but it cannot recover the 15% US withholding tax on dividends, so heavy US dividend payers belong in an RRSP instead. Here are seven US names Canadians should research for a TFSA, and the tax logic behind them.
Why does the account matter more than the stock?
For US stocks, the account you choose can cost or save you more than picking the right company. The reason is the 15% US withholding tax on dividends.
In a TFSA, that tax is deducted at source and you cannot get it back, because the IRS does not recognize the TFSA as a retirement account under the Canada-US tax treaty. In an RRSP or RRIF, the same US dividends come through untouched, because the treaty exempts those accounts.
In a non-registered account, the 15% is withheld but you can claim it back as a foreign tax credit on your Canadian return. The TFSA is the only one of the three where that 15% leaks out and never comes back. Capital gains are the other half of the story. The US does not withhold anything on the growth in a stock's price, in any account. So a US stock that pays little or no dividend and is held for capital appreciation loses almost nothing to withholding in a TFSA, while its gains stay completely tax-free.
That single fact is what makes the TFSA a reasonable home for US growth names and a poor home for US dividend payers.
The takeaway from the numbers above is simple. A TFSA and a non-registered account both lose 15% at source, but only the non-registered account gets it back. The RRSP is the only registered account where US dividends are truly untouched. If income is your goal, that points to the RRSP. If tax-free growth is your goal, the TFSA still works, as long as you lean toward low-yield stocks.
How did we choose these seven US stocks?
We screened for large, established US companies that pay little or no dividend, so the unrecoverable withholding drag inside a TFSA is minimal or zero, and where the reason to hold is capital appreciation rather than income. We deliberately spread the list across insurance, technology, healthcare, payments, and consumer names, so it is not seven versions of the same bet.
This is not a ranking of the best companies in America, and it is not personal investment advice. It is a starting point for your own research. Whether any of these fits depends on your goals, your timeline, your risk tolerance, and what you already own. Treat the list as a set of names to investigate, not a set of instructions. If you want a framework for building the rest of your portfolio, our guide on how to choose a Canadian online broker is a good next step.
Which 7 US stocks should Canadians research for a TFSA?
Here are the seven, ordered by dividend yield from lowest to highest, since a lower yield means less lost to withholding in a TFSA. This list spreads across six sectors, not just big tech.
Berkshire Hathaway (BRK.B). Warren Buffett's conglomerate spans insurance, railroads, energy, and a large equity portfolio, and it pays no dividend, reinvesting everything. That makes it one of the cleanest US names to hold in a TFSA from a tax angle. Greg Abel took over as chief executive on January 1, 2026, and has signalled continuity, including no move to start a dividend.
Chipotle (CMG). The fast casual restaurant chain has never paid a dividend, returning cash through buybacks instead, so there is no withholding drag in a TFSA. It brings consumer discretionary exposure that the rest of the list would otherwise lack.
Nvidia (NVDA). The dominant supplier of AI data centre chips pays only a token dividend, well under 0.1%, so the withholding hit is negligible. It is also the most cyclical name here, tied tightly to the pace of AI spending.
Alphabet (GOOGL). Google's parent started a small dividend in 2024 and has raised it since, but the yield is still only around 0.2%. The draw is search, YouTube, Google Cloud, and its AI work, not the income.
Costco (COST). The warehouse retailer yields roughly 0.6% on its regular dividend, so a small slice of that is lost to withholding in a TFSA. Watch for its occasional special dividends, which are large, unpredictable, and fully subject to the 15% haircut.
Eli Lilly (LLY). The drugmaker behind the Zepbound and Mounjaro weight-loss franchise yields about 0.6%, low for healthcare, and has been growing revenue quickly. The modest yield means a modest but permanent withholding cost inside a TFSA.
Visa (V). The payments network carries the highest yield on this list at roughly 0.7%, so it is where the TFSA withholding bites most, though still lightly. Its toll-booth position on global card spending is the reason investors hold it, not the dividend.
What about US dividend stocks like Coca-Cola or Realty Income?
This is the classic TFSA mistake. High-yield US names, dividend stalwarts like Coca-Cola or Johnson and Johnson, and US real estate investment trusts like Realty Income, are exactly the stocks that lose the most to the 15% withholding in a TFSA, and none of it comes back. A 3% or 4% yield quietly becomes an effective 2.55% or 3.4% after the haircut, every year, forever. US REITs are worse than they look, because their distributions are treated as ordinary dividends for withholding purposes and the full 15% applies. If you want US dividend income, the tax-efficient home is an RRSP, where the treaty removes the withholding entirely. Keep the TFSA for growth and for Canadian dividend payers, which face no US withholding at all.
How should you actually buy US stocks in a TFSA?
Two practical costs decide how much of the theory you keep: currency conversion and your broker. Buying US stocks means converting Canadian dollars to US dollars, and some brokers charge around 1.5% each way to do it, which can quietly dwarf the withholding math on a low-yield stock.
You can cut that cost. Brokers that let you hold US dollars inside a registered account, or that support Norbert's Gambit (buying a dual-listed security in one currency and selling it in the other), can reduce conversion to a few dollars.
Wealthsimple keeps the process simple and lets you hold US dollars, while Questrade and Interactive Brokers are popular with self-directed investors who want low conversion costs and full US market access. Weigh the trade-offs on our broker comparison table, dig into the details in our broker reviews, and use the all-in cost calculator to see what conversion and fees actually cost you. One piece of paperwork matters. Your broker has you sign a W-8BEN form when you open a US-enabled account, and it is what secures the reduced 15% treaty rate instead of the default 30%. The broker handles it, so there is nothing to file with the IRS yourself. Current account offers, if you are shopping for a new one, are on our sign-up bonuses page.
The bottom line
The account decision beats the stock pick. If you are going to hold US equities, favour low or zero dividend growth companies in your TFSA, where the gains are tax-free and there is little or no dividend to lose to withholding, and move your US dividend payers into an RRSP where the treaty protects them. The seven names above are a research starting point built around that logic, not a buy list and not advice tailored to you. Do your own homework, or talk to a licensed advisor, before you act. Broker Guide Canada may earn a commission through affiliate links. This does not influence our editorial rankings. See our full disclosure.
FAQs
Do you pay US withholding tax on stocks in a TFSA?
Yes. US dividends paid into a TFSA are hit with a 15% US withholding tax at source, and because the IRS does not treat the TFSA as a retirement account under the Canada-US tax treaty, you cannot recover it. Capital gains, however, are never subject to US withholding, so the growth on your US stocks stays tax-free.
Are US stocks a good idea in a TFSA?
They can be, if they are growth-oriented and pay little or no dividend. The TFSA shelters capital gains completely, so a low-yield US stock loses almost nothing to withholding while its gains compound tax-free. High-yield US stocks are a poor fit, because the 15% dividend haircut is permanent inside a TFSA.
Should I hold US stocks in a TFSA or an RRSP?
It depends on why you own them. For US dividend income, the RRSP is more tax-efficient, because the treaty removes the 15% withholding entirely. For tax-free growth from low-dividend US companies, the TFSA works well. Many investors split the two: growth in the TFSA, US income in the RRSP.
Are capital gains on US stocks taxed in a TFSA?
No. Neither Canada nor the US taxes the capital gain on a US stock held in a TFSA. The only US tax that reaches into a TFSA is the withholding on dividends, which is why low-yield growth names are the better fit for the account.
Is this list investment advice?
No. It is a research starting point, not personal financial advice or a recommendation to buy any specific stock. The right holdings for you depend on your goals, timeline, and risk tolerance. Use the list as a set of names to investigate, and consider speaking with a licensed advisor before making a decision.
What is the cheapest way to convert CAD to USD in a TFSA?
Norbert's Gambit is usually the cheapest route, and it works inside registered accounts at most brokers. Holding a US dollar account also avoids repeated conversion. Automatic broker conversion is the most expensive option, often around 1.5% each way, so it pays to check your broker's method before you buy.
