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Contrary to what some might think, the Tax-Free Savings Account (TFSA) can be an excellent choice for long-term savings goals. Due to its tax-free withdrawals, the TFSA is understandably often thought of as a short-term savings vehicle. Annual contribution limits are also much lower than that of a Registered Retirement Savings Plan, potentially resulting in the TFSA being the second choice for long-term retirement savings. 

However, for those with long-term time horizons, there’s a strong case to be made to max out TFSA contributions each year. Tax-free withdrawals are certainly a selling point, but you cannot forget that gains are also able to grow tax-free year after year.

With that in mind, long-term TFSA savers should consider looking for funds with growth potential, such as stocks. 

Here are two top companies that together combine as a perfect duo of stocks for anyone about to start their investing journey.

Bank of Montreal

There are more ways than one to earn a return from an investment in a stock. One example could be through appreciation in a stock price. Additionally, some stocks pay a dividend on a recurring basis.

For those interested in earning a passive-income stream through dividend stocks, the Canadian banks are an excellent place to start. Not only are the yields of the Big Five hard to beat, but so are the payout streaks. And when it comes to passive-income investing, you’ll want to make sure you own a dividend-paying company that you can count on.

At today’s stock price, Bank of Montreal’s (TSX:BMO) dividend is yielding just shy of 5%. In addition to that, the bank has been paying a dividend to its shareholders for close to 200 consecutive years. 

Investors looking for a less-volatile and more consistent annual return should consider a trustworthy bank stock like BMO.

Shopify

On the other end of the spectrum with regard to returns would be a high-growth tech stock like Shopify (TSX:SHOP). 

Shopify shareholders certainly shouldn’t be banking on earning a dividend anytime soon. Instead, it’s the massive growth potential from stock price appreciation that should excite long-term investors.

It’s been a wild ride for the tech sector as a whole since the early days of the pandemic. Today, many growth stocks in the tech sector continue to trade far below all-time highs that were set in 2021, including Shopify.

Shares of Shopify are down roughly 60% from late 2021. Still, the growth stock has crushed the market’s returns over the past five years, returning close to 300% to shareholders. In comparison, the S&P/TSX Composite Index has returned less than 30% since mid-2018.

Shopify investors should be prepared for more volatility but need to keep in mind that that comes with serious market-beating growth potential for years to come.

Foolish bottom line

The TFSA can serve multiple purposes for Canadians. Short-term savers have the flexibility to easily make withdrawals at any point in time, completely tax free. Alternatively, long-term savers have the luxury to be able to maximize returns through tax-free compound interest.

If you’ve still got contribution room available in your TFSA, BMO and Shopify are two top TSX stocks that any long-term Canadian investor should have on their watch list.

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