Registered Accounts Review (RRSP, RESP, TFSA, FHSA)

Submitted by nsscadmin on

Over the years the Before You Invest blog has published several posts on registered accounts, including Registered Retirement Saving Plans (RRSPs), Registered Education Savings Plans (RESPs), Tax-Free Savings Accounts (TFSAs) and, most recently, First-home Savings Accounts (FHSAs). Since the introduction of FHSAs in 2023 we have not published a single post that highlighted the differences between these four accounts. Until now.

As you’re likely aware each registered account has its own purpose which can typically be found in their name. An RRSP is for retirement, an RESP is for education costs, an FHSA is for the down payment on a first home and a TFSA is for tax-free saving and investing. This should tell investors enough to know what they should be using each account for, but they need to delve further to discover the characteristics of each account that will inform them how they exactly work and how to make the most of the investments they place in them.

To make things as simple as possible for each account, we’re going to quickly and concisely look at contribution limits, tax implications, and withdrawal implications.

You should consult with your financial advisor and or tax professional to review your specific situation for compliance with income tax laws.


 

RRSP

RESP

TFSA

FHSA

Contribution Limits
  • Annual: Lesser of
    18% of last year’s earned income, or $33,810 (2026)

  • Your actual amount should appear on your CRA -  Notice of Assessment
  • Annual: None

  • Lifetime: $50,000 per beneficiary
  • Annual (2026): $7,000 (Unused contribution room carries over)

  • Lifetime: Depends on how long you’ve been TFSA eligible, max is $109,000 since 2009

  • You should also check your online account with the CRA
  • Annual (2026): $8,000

  • Lifetime:  $40,000

Tax Implications
  • Contributions are tax deductible.

  • Investment growth is tax-deferred.
  • Contributions are NOT tax deductible.

  • Investment growth is tax-deferred.
  • Contributions are NOT tax deductible.

  • Investment growth is tax-free.
  • Contributions are tax deductible.

  • Investment growth is tax-free.

Withdrawal Implications
  • All withdrawals are taxable income
  • Investment growth declared as income by beneficiary
  • All withdrawals tax free

  • Regain contribution amount of withdrawal on Jan 1 of the following year subject to the total lifetime contribution room limit
  • All withdrawals tax free

Special considerations
  • Must be converted to RRIF by December 31st, the year you turn 71 years old
  • RESPs may be eligible for federal matching programs such as the Canadian Education Savings Grant

  •  

Can only be held open for 15 years.

Overcontribution penalties
  • Yes
  • Yes
  • Yes

Yes