Published January 8, 2026 • 4 Min Read
TLDR
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With three main investment accounts options available, how do you choose the right one for your financial goals?
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Each plan comes with different maximum contribution amounts, deadline dates and tax implications.
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This quick check list will help you determine which registered plan — or plans — best serve your goals.
Which of the three main registered investments accounts can best help you achieve your personal savings and investment goals?
Whether you need to fund a new appliance, purchase a home or save for retirement, investing can help you grow your wealth and achieve your financial goals faster. Here are Canada’s three main registered investment accounts that allow you to do just that:
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The Tax-Free Savings Account (TFSA) is a flexible registered investment plan that lets Canadians save for any savings goal they have — be it new furniture, a car purchase, a vacation, retirement income or a combination of things.
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The Registered Retirement Savings Plan (RRSP) is a tax-deferred investment plan that helps Canadians save for their retirement.
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The First Home Savings Account (FHSA) was launched on April 1, 2023, introducing a third registered plan to help Canadians achieve savings, retirement and home ownership goals.
While all three investment accounts offer tax benefits, there are some key differences to be aware of. From each plan’s tax considerations to rules about contributions and withdrawals, here’s everything you need to know about TFSAs, RRSPs and FHSAs.
| Feature | TFSA | RRSP | FHSA |
|---|---|---|---|
| What is it? | A Tax-Free Savings Account is aregistered investment account that holds cash savings and investments that generate tax-free income, allowing you to save for any big-ticket item or goal. Explore TFSAs | A registered investment account that helps you save for retirement, and it comes with tax advantages – the money you save grows tax-deferred and it may help you lower your tax bill, by allowing you to deduct eligible RRSP contributions from your taxable income. Explore RRSPs | A registered plan that can help you save to buy or build a qualifying first home tax-free. Explore FHSAs |
| Who can open one? | Canadian residents with a valid Social Insurance Number (SIN) who have reached the age of majority (18 or 19 depending on the province). | Canadian residents under the age of 71 who have a valid Social Insurance Number (SIN), earned income and have filed an income tax return in Canada. There is no minimum age for opening an RRSP. | Canadian residents with a valid Social Insurance Number (SIN), who are at least the age of majority, no older than 71, and who did not live in a home you owned or jointly owned in the current year or in the previous 4 calendar years. Other conditions may apply. |
| Are contributions tax-deductible? | No | Yes (up to your personal deduction limit) | Yes (up to the annual and lifetime limits) |
| Do my savings grow tax-free or tax-deferred? | Tax-free | Tax-deferred (added to taxable income the year you take out the money; a withholding tax will also apply to early withdrawals) | Tax-free if you use funds for a qualifying first home and meet the qualifying withdrawal criteria |
| How much can I contribute each year? | In 2026 you can contribute $7,000 plus any unused contribution room and any previously withdrawn amounts (you can only recontribute starting January 1 in the year after you make a withdrawal). While the TFSA dollar limit is indexed to inflation, it does not increase annually. The government announces the contribution limits every year. | You can contribute 18% of your previous year’s earned income up to a maximum of $32,490 for 2025. (The max increases every year.) Unused portions are carried forward to the following year. | You can contribute $8,000, and unused portions can be carried forward to the following year, but only for one year. You also have a lifetime contribution limit of $40,000. |
| What are the contribution deadlines? | There is no contribution deadline per say, but new room increases after December 31st. If you haven’t contributed up to your limit in previous years, you can make catch-up contributions. You can identify any remaining contribution room through your CRA account. | The 2025 RRSP contribution deadline is March 2, 2026. If you make contributions after this date, you cannot claim a deduction on your 2025 tax return. | The deadline is always December 31 of the tax year, and you must contribute before that date to have your contribution amount deducted from your 2025 taxable income. |
Visit Compare TFSA vs RRSP vs FHSA for more answers, including information on the types of investments that can be held in each account.
Book an appointment with your advisor for assistance in choosing your best options.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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