RRSP vs TFSA vs FHSA Comparison 2026

Complete 2026 RRSP / TFSA / FHSA Comparison

Feature	RRSP	TFSA	FHSA
2026 Annual Limit	$32,490 (18% of income)	$7,000	$8,000
Lifetime Limit	No cap (annual limits)	$102,000 cumulative	$40,000
Who Can Open	Any Canadian resident earning income, under 71	Any Canadian resident 18+, with SIN	First-time buyers, 18-71, Canadian resident
Contribution Deductible?	Yes	No	Yes
Growth Taxed?	No (tax-deferred)	No (tax-free)	No (tax-free)
Withdrawals Taxable?	Yes — fully taxable income	No	No (qualifying) / Yes (non-qualifying)
Withdrawals Affect Benefits?	Yes (OAS, GIS, credits)	No	No (qualifying)
Room Restored on Withdrawal?	No — room lost forever	Yes — January 1 next year	No
Mandatory Close Age	71 (convert to RRIF)	Never	15 years after opening or age 71
Home Buyers' Plan	Up to $60,000 (repay over 15 yrs)	N/A	Up to $40,000 (no repayment)
Transfer to RRSP?	N/A	N/A	Yes — without using RRSP room
US Dividend Withholding	Exempt (treaty)	15% withheld — not recoverable	15% withheld — not recoverable
Over-contribution Buffer	$2,000 lifetime	None	None
Over-contribution Penalty	1%/month above buffer	1%/month	1%/month
Best For	High earners, retirement savings, income smoothing	All incomes, flexibility, benefit preservation	First-time buyers, bonus RRSP room if no home

Priority Order: Which Account to Fund First in 2026

Given the three registered accounts plus non-registered options, here is the generally recommended contribution priority for most Canadians:

1. Employer RRSP/DPSP matching: Always capture free matching first — it is an instant 50–100% return
2. FHSA (if first-time buyer): $8,000/year, fully deductible, tax-free withdrawal for home, or transfers to RRSP with no room used
3. TFSA (if income under $50K): Flexible, no impact on benefits, withdrawal room restored
4. RRSP (if income over $60K): Deduction most valuable in higher brackets; important for retirement accumulation
5. TFSA (if income over $50K and RRSP is maxed): Continue filling TFSA with after-tax money
6. Non-registered account: After all registered accounts are maxed — capital gains and eligible dividends taxed preferentially

Key Decision Rules

RRSP vs TFSA

If current marginal rate > expected retirement rate: RRSP wins. If current marginal rate = or less than expected retirement rate: TFSA wins. If income is low and GIS/OAS may apply in retirement: TFSA wins decisively. See our full RRSP vs TFSA guide.

FHSA vs RRSP HBP

FHSA wins for almost all first-time buyers: no repayment, deductible, and transfers to RRSP without room if unused. Stack both for maximum down payment. See our FHSA vs HBP comparison.

TFSA vs Non-Registered

TFSA wins until room is exhausted. After that, non-registered is necessary — see our non-registered account guide for ACB tracking and capital gains management.