Compare an RRSP and a TFSA
What is the difference between an RRSP and a TFSA?
The main difference is when tax applies. Eligible RRSP contributions can reduce taxable income, while ordinary withdrawals are taxable. TFSA contributions do not create an income-tax deduction, and ordinary withdrawals are tax-free. The suitable choice depends on your goals and circumstances.
Where to begin
- Define what the money is for and when you may need to use it.
- Check available room for each account separately before depositing.
- Compare the withdrawal rules, investment choices and fees, rather than treating either account as one particular investment.
- For a personal recommendation, discuss your income, benefit interactions and access needs with a qualified adviser.
Before you open the official service
- Savings purpose and time horizon.
- Your own RRSP and TFSA contribution records.
Keep your actual documents and account details off this website. Use the official service’s current checklist before applying.
What to check for your situation
This comparison explains account rules; it does not choose investments or calculate which account will leave you better off.
Fees, processing times and document rules can change. This page helps you navigate; it does not confirm eligibility or replace the government’s instructions.
Official sources
canada.ca · Official websiteCRA — TFSA and RRSP differencesRRSP contributions can create deductions while ordinary withdrawals are taxable; ordinary TFSA withdrawals are tax-free. Both accounts can hold different permitted investments; suitability depends on the individual rather than a universal account ranking.Checked
Prepared by Active K Digital from the linked public guidance. Read our source approach.