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Considering a TFSA, RRSP or RBC High Interest eSavings account? You don’t have to choose—you can hold all three at RBC. 1Legal Discover how each of these accounts can help you reach your goals:
| Feature | TFSA | RRSP | RBC eSavings |
|---|---|---|---|
| What is it? |
A registered savings plan where your investment earnings and withdrawals are tax-free Explore TFSAs |
A registered savings plan where your investment earnings are tax-deferred and your contributions are tax-deductible (up to your personal deduction limit) Explore RRSPs |
An online savings account with high interest paid on every dollar2Legal , calculated daily and paid monthly Explore eSavings |
| What is it typically used to save for? | Save for anything—short or long-term goals (new bike, first home, etc.) | Save for a more comfortable retirement | Save for any reason—for example, your emergency fund |
| Who can open one? | Canadian residents with a Social Insurance Number (SIN) who are at least 18 or age of majority in your province of residence. |
Canadian residents of qualifying age, who have a valid Social Insurance Number (SIN), earned income, and who file a tax return in Canada. |
Canadian residents with a Social Insurance Number (SIN) who are at least 18 or 19 (age of majority in your province) |
| What types of investments can I hold in it?3 Legal, 4 Legal |
|
|
Cash only |
| Can I open an account with someone else? | No—only individual accounts | No—only individual accounts, but you can contribute to a spousal RRSP | Yes—individual and joint accounts allowed |
| Tax Treatment | |||
| Are contributions tax-deductible? | No | Yes (up to your personal deduction limit) | No |
| Do my savings grow tax-free or tax-deferred? | Tax-free (never taxed) | Tax-deferred (taxed when you take the money out) | No, the interest you earn is taxable |
| Are withdrawals taxed? | Tax-free (never taxed) | Taxes are withheld at source. In addition, amounts withdrawn are added to taxable income for the year of the withdrawal. | No |
| Contributing Money | |||
| How much can I contribute each year? | $6,000 for 2022 (subject to change in the future) plus your unused contribution room and any amounts you’ve withdrawn from previous years | 18% of previous year's earned income, less any pension adjustment, up to maximum annual limit ($29,210 for 2022), plus any unused contribution room from previous years. | No Limit |
| Is there an over-contribution penalty tax? | Yes, 1% per month on excess contributions | Yes, 1% per month on excess contributions (if you exceed your deduction limit by $2,000) | No |
| Can I carry forward unused contribution room? | Yes, indefinitely | Yes, until the year you turn 71 | Not applicable/no limit |
| Do I have to have earned income to contribute? | No | Yes | No |
| Can I contribute after age 71? | Yes |
No, you must collapse your plan by December 31 of the year you turn 71. You can convert your plan to a RRIF or annuity to receive a steady stream of income, or make a taxable withdrawal for the full balance of your plan. |
Yes |
| Withdrawing Money | |||
| Can I take my money out for any reason? | Yes, although timing depends on what investments you hold in your TFSA | Yes, although timing depends on what investments you hold in your RRSP. Note however that taxes are withheld at the time of withdrawal (unless participating in the Home Buyers’ Plan or Lifelong Learning Plan) | Yes, at any time |
| If I withdraw money, do I get my contribution room back? | Yes, withdrawal amounts are added to contribution room the following year | No, withdrawals have no bearing on your deduction limit or contribution room. | Not applicable |
| Do withdrawals affect government benefits? | No | Possibly. Withdrawals increase your income for the year in which they’re made. This could impact income tested government benefits like Old Age Security (OAS). | No |
Ready to Invest?
Open or contribute to your TFSA today!
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Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.
Mutual Funds are sold by Royal Mutual Funds Inc. (RMFI). There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Please read the Fund Facts/prospectus before investing. Mutual fund securities are not insured by the Canada Deposit Insurance Corporation. For funds other than money market funds, unit values change frequently. For money market funds, there can be no assurances that a fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in a fund will be returned to you. Past performance may not be repeated. RMFI is licensed as a financial services firm in the province of Quebec.
RBC Direct Investing Inc. and Royal Bank of Canada are separate corporate entities which are affiliated. RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Royal Bank of Canada and certain of its issuers are related to RBC Direct Investing Inc. RBC Direct Investing Inc. does not provide investment advice or recommendations regarding the purchase or sale of any securities. Investors are responsible for their own investment decisions. RBC Direct Investing is a business name used by RBC Direct Investing Inc.
RBC InvestEase is a restricted portfolio manager providing access to model portfolios consisting of RBC iShares ETFs with each model portfolio holding up to 100% of RBC iShares ETFs. RBC iShares ETFs are comprised of RBC ETFs managed by RBC Global Asset Management Inc. (RBC GAM) and iShares ETFs managed by BlackRock Canada Limited (BlackRock Canada). RBC GAM and BlackRock Canada have entered into a strategic alliance to bring together their respective ETF products under the RBC iShares brand, and to offer a unified distribution support and service model for RBC iShares ETFs.
Other products and services may be offered by one or more separate corporate entities that are affiliated to RBC InvestEase Inc., including without limitation: Royal Bank of Canada, RBC Direct Investing Inc., RBC Dominion Securities Inc., RBC Global Asset Management Inc., Royal Trust Corporation of Canada and The Royal Trust Company. RBC InvestEase Inc. is a wholly-owned subsidiary of Royal Bank of Canada and uses the business name RBC InvestEase.
The services provided by RBC InvestEase are only available in Canada.
Mutual Funds are sold by Royal Mutual Funds Inc. (RMFI). There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Please read the Fund Facts/prospectus before investing. Mutual fund securities are not insured by the Canada Deposit Insurance Corporation. For funds other than money market funds, unit values change frequently. For money market funds, there can be no assurances that a fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in a fund will be returned to you. Past performance may not be repeated. RMFI is licensed as a financial services firm in the province of Quebec.
RBC Direct Investing Inc. and Royal Bank of Canada are separate corporate entities which are affiliated. RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Royal Bank of Canada and certain of its issuers are related to RBC Direct Investing Inc. RBC Direct Investing Inc. does not provide investment advice or recommendations regarding the purchase or sale of any securities. Investors are responsible for their own investment decisions. RBC Direct Investing is a business name used by RBC Direct Investing Inc.
RBC InvestEase is a restricted portfolio manager providing access to model portfolios consisting of RBC iShares ETFs with each model portfolio holding up to 100% of RBC iShares ETFs. RBC iShares ETFs are comprised of RBC ETFs managed by RBC Global Asset Management Inc. (RBC GAM) and iShares ETFs managed by BlackRock Canada Limited (BlackRock Canada). RBC GAM and BlackRock Canada have entered into a strategic alliance to bring together their respective ETF products under the RBC iShares brand, and to offer a unified distribution support and service model for RBC iShares ETFs.
Other products and services may be offered by one or more separate corporate entities that are affiliated to RBC InvestEase Inc., including without limitation: Royal Bank of Canada, RBC Direct Investing Inc., RBC Dominion Securities Inc., RBC Global Asset Management Inc., Royal Trust Corporation of Canada and The Royal Trust Company. RBC InvestEase Inc. is a wholly-owned subsidiary of Royal Bank of Canada and uses the business name RBC InvestEase.
The services provided by RBC InvestEase are only available in Canada.
1)
Subject to each account’s eligibility requirements.
2)
The interest rate is an annual interest rate. It is a simple interest calculation. Interest is calculated daily on the closing credit balance and paid monthly. Interest rate is subject to change at any time without notice.
3)
Assets in a TFSA must be Qualified Investments under the Income Tax Act. If the TFSA holds non-Qualified Investments, it could be subject to tax.
4)
Assets in an RRSP must be Qualified Investments under the Income Tax Act. If the RRSP holds non-Qualified Investments, it could be subject to tax.