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Comparing TFSAs, RRSPs, and FHSAs

Which registered investment is best for you, and when?

One of the best ways to determine which registered products to invest in is the ability to compare each investment option based on your financial priorities, life stage, and needs. If your goals include saving for a rainy day, your retirement, or saving for your first home, here's an overview of three registered savings products that will help you achieve your goal.
 
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PRODUCT

TFSA

RRSP

FHSA

FEATURES
What is it?









 
A registered plan where your investment earnings and withdrawals are tax-free

Explore TFSAs






 
A registered plan where your contributions are tax-deductible (up to your personal deduction limit) and investment earnings are tax-deferred. (Taxes are withheld when you withdraw funds, usually when you are retired and in a lower tax bracket.)

Explore RRSPs

 
A registered plan designed to help first-time homebuyers. Your contributions are tax-deductible and investment earnings and withdrawals are tax-free if used to purchase your first home.

Explore FHSAs




 
What is it typically used to save for?


 
Shorter term goals (new bike, vacation, home reno, etc.) or longer term (retirement or home ownership)
 
Retirement




 
Your first home




 
Who can open one?








 
Canadian residents with a Social Insurance Number (SIN) who are at least 18 (age of majority)







 
Canadian residents with a Social Insurance Number (SIN) who are under age 71, have earned income, and file a tax return in Canada





 
Canadian residents with a Social Insurance Number (SIN) who are at least the age of majority in your province and under age 71, and you and/or your spouse or common-law partner have not owned a home where you lived in the current calendar year or at any time in the preceding four calendar years
What types of investments can I hold in it?









 
         
 
     

 
Can the plan be opened jointly?
 
No, a TFSA is an individual plan 

 
No, an RRSP is an individual plan, but you can contribute to a spousal RRSP
 
No, an FHSA is an individual plan

 
TAX TREATMENT
Are contributions tax-deductible? No


 
Yes, up to your personal limit


 
Yes, up to the annual and lifetime limits

 
Do my savings grow tax-free or tax-deferred?

 
Tax-free




 
Tax-deferred (added to taxable income the year you take the money out; a withholding tax will also apply to early withdrawals)
 
Tax-free as long as you use funds for a qualifying first home



 
CONTRIBUTING FUNDS
How much can I contribute each year?

 
$7,000 for 2025, plus your unused contribution room and any amounts you’ve withdrawn from previous years
 
18% of previous year’s earned income, less any pension adjustment, up to maximum annual limit ($32,490 for 2025) ($33,810 for 2026)
 
$8,000 annually, plus up to $8,000 of your unused contribution room, up to a maximum lifetime limit of $40,000

 
Is there an over-contribution penalty tax? Yes, 1% per month on excess contributions

 
Yes, 1% per month on excess contributions (if you exceed your deduction limit by $2,000)
 
Yes, 1% per month on excess contributions

 
Can I carry forward unused contribution room? Yes, indefinitely



 
Yes, until December 31, the year you turn 71


 
Yes, unused contribution room can be carried over to the next year, up to a maximum of $8,000

 
Do I have to earn income to get contribution room? No Yes No
Can I contribute after age 71?
Yes

No, you must convert your plan to a RRIF or annuity to receive a steady stream of income, or make a taxable withdrawal for the full balance of your plan by December 31 of the year you turn 71.

No, the funds in your FHSA must be used by the 15th anniversary of opening the FHSA or December 31 of the year you turn 71, whichever comes earlier
WITHDRAWING FUNDS
Can I take my money out for any reason?


 
Yes. Variable funds can be withdrawn at any time, for any reason. TFSA funds held within a GIC can be withdawn only at the end of the term


 
Yes, but taxes are withheld at the time of withdrawal (unless participating in the Home Buyers’ Plan or Lifelong Learning Plan)
 
Yes, although timing depends on what investments you hold in your FHSA. If you use the funds for anything other than a qualifying first home, your withdrawal will be taxable
If I withdraw money, do I get my contribution room back?


 
Yes, withdrawal amounts are added to contribution room the following year




 
No. If you do a withdrawal from an RRSP, you lose the contribution room, meaning you can't recontribute the funds in future years, with the exception of Home Buyer Plan withdrawals, which must be contributed back over a 15 year period
No





 
Do withdrawals affect government benefits?
No
Possibly, yes—withdrawals increase your income, which could impact government benefits like Old Age Security (OAS) payment
 
It depends on the type of withdrawal:
  • Withdrawals used to purchase a qualifying home will not affect government benefits
  • Non-qualifying withdrawals increase your income, which could impact government benefits like Old Age Security (OAS) payments

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. 

 

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