Updated March 2025 · 10 min read
Canada has a comprehensive system of registered accounts — each with a specific purpose, contribution limit, and tax treatment. Understanding which accounts exist, and which ones apply to your situation, is the foundation of smart Canadian financial planning.
| Account | Purpose | 2025 Limit | Contribution Tax | Growth | Withdrawal Tax |
|---|---|---|---|---|---|
| TFSA | Any savings goal | $7,000/yr ($102K cumulative) | After-tax (no deduction) | Tax-free | Tax-free |
| RRSP | Retirement | 18% of income, max $32,490 | Tax-deductible | Tax-deferred | Taxed as income |
| FHSA | First home purchase | $8,000/yr ($40K lifetime) | Tax-deductible | Tax-free | Tax-free (for home) |
| RESP | Child's education | $50,000 lifetime | After-tax (no deduction) | Tax-deferred | Taxed in student's hands |
| RDSP | Disability savings | $200,000 lifetime | After-tax (no deduction) | Tax-deferred | Partially taxable |
| RRIF | RRSP conversion (retirement income) | Min. withdrawal required | N/A (converted from RRSP) | Tax-deferred | Taxed as income |
| LIRA | Locked-in pension funds | Varies (pension transfer) | N/A (locked-in) | Tax-deferred | Taxed as income (via LIF) |
The most flexible registered account in Canada. Use it for any goal — retirement, emergency fund, home savings, or investment. Contributions use after-tax dollars but all growth and withdrawals are completely tax-free. The 2025 limit is $7,000; cumulative limit since 2009 is $102,000.
Best for: Everyone. Priority account for most Canadians.
Full guide: TFSA Contribution Room 2025
Canada's primary retirement savings vehicle. Contributions are tax-deductible, reducing your taxable income. All growth is tax-deferred until withdrawal. The 2025 limit is 18% of 2024 earned income, up to $32,490, plus unused room carried forward. Must convert to RRIF by end of year you turn 71.
Best for: Working Canadians with taxable income, especially higher earners.
Full guide: RRSP Contribution Limit 2025
The newest registered account (2023), combining RRSP deductions with TFSA-style tax-free withdrawals — exclusively for first-time home buyers. Contribute $8,000/year (max $40,000 lifetime), deduct contributions from income, and withdraw tax-free to buy your first home. If no home is purchased, transfer to RRSP tax-free.
Best for: First-time home buyers. Open immediately to start accumulating room.
Full guide: FHSA Guide 2025
Canada's education savings vehicle, supercharged by the Canada Education Savings Grant (CESG): 20% on the first $2,500/year = up to $500/year in free government money, $7,200 lifetime maximum. Lifetime contribution limit is $50,000 per beneficiary. Growth is tax-deferred; withdrawals are taxed in the student's hands (usually minimal tax).
Best for: Parents and grandparents saving for a child's post-secondary education.
Full guide: RESP Guide 2025
A long-term savings plan for Canadians with disabilities (those eligible for the Disability Tax Credit). The government provides Canada Disability Savings Grants (CDSG) of up to $3,500/year and Canada Disability Savings Bonds (CDSB) of up to $1,000/year for lower-income families. Lifetime contribution limit is $200,000. Withdrawals partially taxable.
Best for: Canadians eligible for the Disability Tax Credit and their families.
Not a savings account — a mandatory conversion of your RRSP by December 31 of the year you turn 71. Minimum annual withdrawals are required (percentage increases with age). Withdrawals are taxed as income. The RRIF allows continued tax-deferred growth on the remaining balance while providing required income.
Best for: RRSP holders turning 71 (mandatory).
Holds pension funds transferred from a former employer's defined benefit or defined contribution pension plan. Funds are "locked in" — you generally cannot withdraw freely. At retirement, a LIRA is typically converted to a LIF (Life Income Fund) from which minimum and maximum annual withdrawals apply.
Best for: Employees who leave a workplace pension before retirement age.
Not a separate account type — a regular RRSP registered in a spouse's name but funded using the contributor's RRSP room. Powerful income-splitting tool: contributions reduce the contributor's income; withdrawals (after 3-year attribution period) are taxed in the lower-income spouse's hands.
Stop paying $200-$360/year in bank fees. KOHO's no-fee account frees up money you can redirect into your TFSA or RRSP. Use code 45ET55JSYA for a sign-up bonus.
Get KOHO Free — Use Code 45ET55JSYA