Canadian investors are blessed with an abundance of stellar income-paying investments to make any account into a cash-pumping machine. Even better is when investors opt to invest in a TFSA, allowing that investment and future earnings to continue stacking tax-free.
While there’s no shortage of great investments, here’s how I would use the entirety of my 2025 $7,000 TFSA limit.
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Keep it simple, invest in a big bank
Canada’s big bank stocks are superb picks. They are incredibly stable and offer defensive appeal and growth potential from foreign markets. When it comes to dividends, the big banks have been paying out without fail for nearly two centuries.
While that’s a great option for any investor seeking a TFSA-turned cash-pumping machine, Bank of Montreal (TSX: BMO) represents a unique option for investors.
BMO is the oldest of the big banks and first started paying dividends back in 1830.
Let that incredible span of time sink in for a moment. That’s pre-Confederation, spanning multiple World Wars, the Great Depression, countless recessions, and most recently, the COVID pandemic.
Today, BMO offers investors a tasty quarterly dividend that pays out a 3.73% yield.
Turning to growth, BMO has been focused on expanding its presence in the U.S. market in recent years. Thanks to its latest acquisitions, BMO is one of the largest lenders in the U.S., with an impressive network that stretches across 32 states.
Between the defensive appeal, juicy dividends and growing presence abroad, BMO is a cash-pumping machine that is just too hard to ignore.
How about a high-yield defensive gem?
Another stellar option for investors looking to create a cash-pumping machine is Telus (TSX: T). Telus is one of Canada’s big telecoms. Like the banks, telecoms boast a significant defensive moat.
In the case of Telus, that moat is the reliable subscriber-based business model the telecom follows. Specifically, the company offers internet, TV, wireless and wireline services to subscribers across Canada.
Telus is also investing heavily in upgrading its core business. The telecom announced a whopping $70 billion investment to bolster its operations across Canada over the next five years. That investment, which includes network infrastructure upgrades as well as artificial intelligence data centres, has massive long-term potential.
Turning to dividends, Telus really shines. The company offers a quarterly dividend that pays out an insane 7.53% yield. Telus has also provided an annual or better uptick to that dividend going back nearly two decades.
That juicy yield, combined with its growth potential and defensive moat, makes Telus a must-have for investors seeking a cash-pumping machine for their portfolio.
Generate a stable and reliable income
The third option for those looking for that cash-pumping machine investment is Canadian Utilities (TSX: CU). Utility stocks are some of the most defensive investments on the market.
Canadian Utilities provides essential, necessity-based services. This includes electricity and natural gas distribution, as well as power generation services. These services cannot be cut back on or downgraded the same way a household may shop at a discount retailer or cut back on.
Adding to that, Canadian Utilities’s revenue stream is backed by long-term, regulated contracts. This means that the company continues to generate a reliable and recurring revenue stream. And that stream allows the company to invest in growth and pay out a juicy quarterly dividend.
That quarterly dividend is the envy of the market. As of the time of writing, Canadian Utilities pays out a yield of 4.80%. While that is impressive, it’s another fact that pushes this stock to the top of any cash-pumping machine TFSA wish list.
Canadian Utilities has provided investors with annual upticks to that dividend for an incredible 53 consecutive years without fail.
That makes the stock a perfect buy-and-forget option for any portfolio.
Create your cash-pumping machine
One of the great things about a TFSA is the tax-free nature of the earnings. This means that allocating the full $7,000 to the trio of stocks mentioned above can provide a unique opportunity to grow your portfolio on autopilot.
Here’s how that first year pans out if just $2,500 is allocated to each stock.
| Company | Recent Price | No. Of Shares | Dividend | Total Payout | Frequency |
| Bank of Montreal | $176.05 | 14 | $6.52 | $91.28 | Quarterly |
| Telus | $22.02 | 113 | $1.67 | $188.71 | Quarterly |
| Canadian Utilities | $37.96 | 65 | $1.83 | $118.95 | Quarterly |
