All three accounts let your savings grow without yearly tax. They differ in when you get the tax break: on the way in, on the way out, or both.
| RRSP | TFSA | FHSA | |
|---|---|---|---|
| Contributions deductible? | Yes | No | Yes |
| Withdrawals taxed? | Yes | No | No, for a qualifying first home |
| 2026 room | 18% of 2025 earned income, up to $33,810 | $7,000 (plus unused room from earlier years) | $8,000 a year, up to $40,000 in total |
| Deadline for the 2026 tax year | March 1, 2027 | No deadline; room carries forward | December 31, 2026 |
How to choose
- Saving for a first home: the FHSA usually comes first. You get a deduction now and a tax-free withdrawal to buy your home. Your room starts only once you open an account, so open one early even with a small amount.
- Higher income now than expected in retirement: the RRSP usually wins, because you deduct at a high rate and withdraw at a lower one.
- Lower income now, or you may need the money: the TFSA is often better. Withdrawals are tax-free and the room comes back the following year.
You don't have to claim an RRSP or FHSA deduction in the year you contribute. Carrying it forward to a higher-income year can be worth more.