TFSA vs RRSP vs FHSA: Quick Comparison Table
How They Work TogetherHere’s the key: you don’t have to pick only ONE!
Smart investors use all three strategically.Here is a possible strategyThe “Stacked” Strategy:
| Feature | TFSA | RRSP | FHSA |
| Contributions | After-Tax | Pre-Tax (tax-deductible) | Pre-Tax (tax-deductible) |
| Withdrawals taxed? | No | Yes | No (if for home purchase) |
| Best for | General investing, flexibility | Retirement savings, high earners | First-time home buyers |
| Annual limit | $7,000 (2025) | 18% of income ($32,490 max) | $8,000 |
| Lifetime limit | $102,000 (as of 2025) | None | $40,000 |
| Penalty for early withdrawal | None | Yes (withholding + income tax) | Yes (if not for home) |
| Age to open | 18+ | No age minimum, but income required | 18-71, must be a first-time buyer |
- Start with a TFSA Build an emergency fund or invest tax-free. It’s flexible and has zero penalties.
- Open an FHSA if buying a home in the next 10–15 years Max $8K/year gets you tax deductions and tax-free withdrawal for your down payment.
- Contribute to RRSP once your income climbs and tax savings become meaningful. Let the deduction work in your favour when you’re earning more
- $8K FHSA → tax deduction + future down payment
- $5K TFSA → flexible savings/investments
- RRSP? Not yet — income too low for major tax benefit (could be wasteful at this point in time)
- Using a TFSA like a chequing account. It’s meant for investing, not parking cash long-term
- Thinking RRSP refunds are “free money.” You still pay tax later, use the refund to reinvest, not blow it
- Ignoring the FHSA. It’s a government handout for home buyers and most Canadians still haven’t opened one
- The TFSA is your tax-free growth engine
- The RRSP is your tax-delaying retirement tool
- The FHSA is your golden ticket to your first home
This article was reviewed by a certified professional accountant(CPA)
