This guide is general education, not advice about your situation. Your personal contribution room is in CRA My Account, and the official rules are on canada.ca. A licensed professional can help you decide what fits you.
The quick comparison
| TFSA | RRSP | FHSA | |
|---|---|---|---|
| Best known for | Flexible, tax-free growth | Retirement saving with a tax deduction now | Saving for a first home |
| Tax deduction when you put money in? | No | Yes | Yes |
| Tax when you take it out? | No | Yes, taxed as income | No, for a qualifying home purchase |
| 2026 limit | $7,000 a year, plus unused room | 18% of 2025 earned income, up to $33,810, plus unused room | $8,000 a year, $40,000 lifetime |
| Withdraw any time? | Yes. The amount is added back to your room the next year | Yes, but it's taxed and the room is gone | For a first home. Other withdrawals are taxed |
TFSA: the flexible one
A Tax-Free Savings Account lets your money grow without tax, and you can take it out whenever you want, also tax-free. You don't get a deduction when you put money in.
- Open to Canadian residents 18 and older with a valid SIN.
- The 2026 annual limit is $7,000. Room builds every year from the year you turn 18, even if you never open an account.
- Withdrawals are added back to your room on January 1 of the next year. Putting it back sooner can cause an over-contribution, which is taxed at 1% a month.
- Despite the name, a TFSA can hold cash, GICs or investments.
RRSP: the retirement one
A Registered Retirement Savings Plan gives you a tax deduction for what you put in, and the money grows tax-deferred. You pay tax when you take it out, usually in retirement when your income, and tax rate, may be lower.
- Your room is 18% of last year's earned income, up to the yearly maximum ($33,810 for 2026), minus any workplace pension adjustment, plus unused room.
- Your Notice of Assessment from the CRA shows your exact limit.
- The Home Buyers' Plan lets first-time buyers withdraw up to $60,000 for a home and repay it over time.
- If your employer matches RRSP contributions, that match is part of your pay. Ask HR how it works.
FHSA: the first-home one
The First Home Savings Account combines the best parts of both: a deduction when you put money in, like an RRSP, and tax-free withdrawals for a qualifying first home, like a TFSA.
- For first-time home buyers who are Canadian residents, generally 18 to 71. In general, you qualify if you didn't live in a home you or your spouse owned in the current year or the previous four.
- $8,000 a year, up to $40,000 in total. Room starts when you open the account, so opening one early can make sense even with a small deposit.
- Up to $8,000 of unused room carries forward, so the most you can add in one year is $16,000.
- If you don't buy a home, you can generally move the money to your RRSP without using RRSP room.
Questions that help you decide where to start
- Are you a first-time buyer who might buy in the next 15 years? Many people look at the FHSA first.
- Might you need the money before retirement? The TFSA's flexibility helps.
- Is your income high now and likely lower in retirement? The RRSP deduction is worth more at higher tax rates.
- Does your employer match? That match is hard to beat.
Many Canadians use more than one. The right mix depends on your income, goals and timeline, which is where a licensed advisor can help.
Opening one
You can open all three at most banks, credit unions and online brokerages. Low-cost online platforms let you open them yourself in minutes. Compare fees before you choose. Over decades, a 1% difference in yearly fees adds up to a lot.
Questions
What is the TFSA limit for 2026?
The annual TFSA dollar limit for 2026 is $7,000. Unused room carries forward, so your personal room may be much higher. Check your exact room in CRA My Account.
What is the RRSP limit for 2026?
Your RRSP room for 2026 is 18% of your 2025 earned income, up to a maximum of $33,810, adjusted for any workplace pension and plus unused room from previous years. Your Notice of Assessment shows your exact number.
How much can I put in an FHSA?
Up to $8,000 a year and $40,000 in total. Room only starts building once you open the account, and up to $8,000 of unused room carries forward to the next year.
Are a TFSA and a savings account the same thing?
No. A TFSA is a type of account that can hold savings, GICs or investments, and growth inside it is tax-free. A TFSA can be a savings account, but it doesn't have to be.