Canadian savings guide

RRSP vs TFSA: what is the difference?

RRSPs and TFSAs are both Canadian registered accounts, but their contribution, tax and withdrawal rules are different.

In short

RRSP contributions may be deductible when you file a tax return and withdrawals are generally taxable. TFSA contributions are not deductible, but qualified withdrawals are generally tax-free.

Contribution room

Contribution room is personal. Check your CRA account or notice of assessment rather than relying on a generic percentage or threshold. Overcontributions can have consequences.

Choosing between them

The suitable option depends on income, goals, cash-flow needs and many personal factors. This guide is educational, not an investment recommendation.

Use the RRSP contribution planner to turn a contribution target into a monthly budget, then verify your available room with CRA.