Investments
TFSA, RRSP and FHSA — the right account for each goal
The TFSA, RRSP and FHSA each give your savings a different tax advantage. I help Ontario families decide which account fits which goal and in what order to fund them — including the rules newcomers need to know.
What's included
What we’ll cover together.
Included
- What each account is designed for and how withdrawals are treated
- Choosing an order of priority that suits your situation
- Newcomer specifics, such as when contribution room begins
Worth a conversation if
- You're new to Canada
- You're saving for a first home
- You're not sure whether to choose a TFSA or an RRSP
How it works
Four clear steps.
Step 1: Your goals and income
A first home, retirement or flexible savings — and your tax bracket now and later.
Step 2: Check your room
We look at your contribution room for each account, using your CRA information.
Step 3: Set the order
Which account to fund first, and how much, so each dollar works hardest.
Step 4: Automate and review
Regular contributions, and an annual check as your income and room change.
What does TFSA, RRSP & FHSA cost?
Opening a registered account doesn't cost much on its own; the costs come from the investments you hold inside it and any account fees. I'll explain those clearly so you can compare.
How long does it take?
Accounts can usually be opened within days. The most important timing rule is the RRSP deadline — contributions made within 60 days after year-end can count for the previous tax year.
Common questions
TFSA, RRSP & FHSA, answered.
Should I contribute to a TFSA or an RRSP first?
It depends on your tax rate now compared with what you expect in retirement, and what you're saving for. RRSPs often suit higher earners saving for retirement; TFSAs suit flexible goals and lower incomes. Many people use both, in an order that fits their situation.
What happens if I over-contribute to my TFSA?
The CRA charges a 1% tax per month on the highest excess amount in that month until it's removed or new room becomes available. Withdrawals are only added back to your room the following January, which catches many people out. Checking your room first avoids this.
Can I use an FHSA and the RRSP Home Buyers' Plan together?
Yes. A qualifying first-time buyer can use both the FHSA and the RRSP Home Buyers' Plan for the same home purchase, as long as they meet each program's conditions. Using both can significantly increase what you have for a down payment.
Related
Let’s talk about your family’s plans.
A relaxed first conversation about where you are and where you'd like to be. Bring your questions — and your family, if you like.
Your message comes straight to me.— Rahul
- savanirahul42@gmail.com
- English · ગુજરાતી · हिन्दी
- Ontario, Canada