Choose the right accounts for your saving and retirement goals

The table below compares the key features and benefits of RRSPs, TFSAs and savings accounts.

QuestionTFSARRSPSavings account
What is the account for?General savings, retirement savings, home purchase, continuing educationRetirement savings, home purchase, continuing educationGeneral savings
How much can I contribute?Up to $6,000 in 2020Up to 18% of the income you earned in the previous year (up to a maximum of $26,500 for the 2019 tax year and $27,230 for 2020)No limit
Can I delay contributions until a later date?Yes, unused contribution room can be carried forwardYes, unused contribution room can be carried forwardThere is no contribution limit
Can I deduct contributions from my income tax?NoYes, an RRSP contribution can reduce the income tax you payNo
What can I invest in?A wide range of investmentsA wide range of investmentsYour financial institution pays interest on the money in your account – currently at historically low rates
Will my investments be taxed as they grow?NoNoYes
Will I be taxed when I withdraw money?NoYes, on both your original contributions and the money you’ve earned; however, by the time you withdraw money from your RRSP, your income may be lower, so you'll be taxed at a lower rateNo
Can I recontribute amounts that I withdraw?Yes, withdrawn amounts can be contributed in future yearsYes, if you have available contribution room in the year you wish to recontributeYes
At what age can I start saving?18Any ageAny age
When do I have to cash out?No requirementIn general, your RRSP must be converted to a Registered Retirement Income Fund (RRIF), annuity or other income option at age 71, and you must make minimum taxable withdrawals; you can also simply deregister your RRSP savings, although this may result in unwanted tax consequencesNo requirement
Will cashing out affect any of my government benefits?No, because TFSA withdrawals don’t count as incomeMaybe, because RRSP withdrawals count as income; the extra income could reduce the amount you get from some “income-tested” benefitsNo, because withdrawals don’t count as income