Compare Savings Options: TFSAs, RRSPs and Savings Accounts

July 25, 2022 | RBC


There are a number of options for Canadians to save for the future. Here's a comparison of the 3 most common savings vehicles.

There are a number of options when it comes to saving for the future. Some are more tax-efficient, while others provide more flexibility. Here is a comparison of 3 common savings vehicles — TFSA, RRSPs and Savings Accounts.

When examining your saving choices, it's important to note there is no single or absolute answer that fits everyone's situation. Instead, there are many considerations that may make a particular savings vehicle (or a combination of several vehicles) more suitable for you. In making a decision about where to save, remember to give some thought to your personal goals and objectives.

Here are the features of three common savings vehicles along with some considerations for you to consider:




Savings account

What is it?

A registered investment plan where your investment earnings and withdrawals are tax-free.

A registered investment plan where your investment earnings are tax-deferred and your contributions are tax-deductible.

An account with interest paid on every dollar, calculated daily and paid monthly.

How can I use it?

Save for anything you want — short or long-term goals

Save for retirement

Save for anything you want

Who owns the account?

Individual only

Individual only (Learn about Spousal RRSPs)

Individual or joint

Tax Treatment




Tax-deductible contributions?




Savings grow tax-free or tax-deferred?

Tax-free (never taxed)

Tax-deferred (taxed upon withdrawal)

The interest you earn is taxable

Taxed withdrawals?

Tax-free (never taxed)

Taxed (added to taxable income the year the money is withdrawn)






Annual contribution limits?

$6,000 for 2022 (subject to change) plus previous years' unused contribution room

18% of the previous year's earned income, less any pension adjustment, up to the maximum annual contribution limit

No limit

Over-contribution penalty tax?

Yes, 1% per month on excess contributions

Yes, 1% per month on excess contributions if you exceed the $2,000 lifetime over-contribution amount


Carry-forward of unused contribution room?

Yes, indefinitely

Yes, until the year you turn 71

Not applicable/no limit

Need earned income to contribute?




Ability to contribute after age 71?


No, must convert to an RRIF or annuity by the end of the year you turn 71, or close the plan






Withdraw savings for any reason?

Yes, although timing depends on your investments

Yes, but taxes are withheld at the time of withdrawal (unless participating in the Home Buyer's Plan or Lifelong Learning Plan)

Yes, at any time

Withdrawals affect contribution room?

Yes, withdrawal amounts are added to the contribution room the following year

No, contributions are based on the previous year's earned income


Withdrawals affect government benefits?




There isn't a one-size-fits-all answer in deciding how you want to save. It's a personal decision you should make based on your goals, circumstances, tax rates and personal habits. If you need help with the decision-making process, speak to a dedicated RBC Healthcare Specialist, who can help you examine your options.

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This article originally appeared on the RBC Healthcare - Advice & Learning