If investors are looking to add one or more of those monthly dividend stocks, fortunately there are more than a few great candidates to choose from, but first let’s talk about the tax-free savings account (TFSA).
Passive income made possible by your TFSA
Choosing the right investments isn’t the only step in building that monthly dividend income. It’s also about where to store those investments. And that’s where the beauty of the TFSA comes into play.
Basically, the TFSA is a special type of account that allows investors to make after-tax contributions up to a fixed amount ($7,000 in 2025). These contributions can then be directed towards any form of investment.
Best of all, unlike a registered retirement savings plan, withdrawals through the TFSA are tax-free (and so are the dividends, capital gains and interest).
How would you generate a cool $500/month in monthly dividend income from your TFSA?
To do that, let’s take a look at two great real estate investment trusts (REITs) that pay out monthly.
Option 1: RioCan REIT
RioCan (TSX:REI.UN) is one of Canada’s largest REITs, with a portfolio of mixed-use retail and residential properties. Historically, RioCan has focused on the retail side of the market, owning strips with anchor commercial retail tenants.
In recent years there has been a shift towards more mixed-use housing, presenting a unique opportunity for investors.
These mixed-use properties are located along high-traffic corridors, consisting of residential towers sitting on top of various retail levels. Offering the best of both worlds, the properties are located in metro markets along busy transit corridors.
This means that potential investors considering RioCan can earn a monthly dividend income, just like a landlord collecting rent every month. At the time of writing, the return on that monthly payment is an attractive 6.14%.
This means that investors who can put $45,000 into their TFSA will earn approximately $235 per month. That fact alone makes this a solid investment to earn monthly dividend income without any headaches for the landlord.
Best of all, this investment comes without the hassles that come with owning a rental property, such as maintenance, property taxes, down payments, and finding tenants.
Option 2: Slate Grocery REIT
The best investments are those that provide a necessary service that we use every day, but are often dismissed as investments. Grocers are perfect examples of this, and Slate Grocery REIT (TSX:SGR.UN) is another monthly dividend option that investors can consider.
Slate is a US-based grocery REIT. The company has as many as 110 properties across the US in metropolitan markets. These properties generate a reliable income stream and often include secondary tenants beyond grocery store tenants.
These secondary tenants are the banks, restaurants and medical offices that are often located next to the anchor property. In the grand scheme of things, it’s a welcome new source of revenue for Slate.
In terms of income, Slate’s monthly payout is one of the best dividend yields on the market. At the time of writing, the yield is a whopping 8.19%. Given the same $45,000 investment, investors can expect to make as much as $310 each month from that investment.
As far as monthly dividend income options go, Slate is hard to ignore.
Monthly Dividend Income: Your $500/month Blueprint
A $45,000 investment in both RioCan and Slate could yield a juicy monthly dividend income of over $500. Here’s what that mix looks like:
| Company | Recent price | Number of shares | Dividend | Total/monthly payout | Frequency |
| RioCan real estate | $18.57 | 2,423 | $1.16 | $2,810.68/ $234.22 | Monthly |
| Slate Grocery REIT | $14.64 | 3,073 | $1.21 | $3,718.33/ $309.86 | Monthly |
Combined, they provide an income of $6,529.01, or $544.08 per month.
REITs like RioCan and Slate Grocery offer a simple, practical way to turn your TFSA into an engine for monthly dividend income. Their strong returns, defensive appeal and consistent distributions make them ideal for long-term investors looking for lifetime income.
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