Investment Accounts in Canada: TFSA, RRSP, FHSA, RESP and More

1. TFSA: Tax-Free Growth for Any Goal

Who can open one. Any resident of Canada who is 18 or older and has a valid social insurance number. Where the age of majority is 19, you open it at 19 but keep the room from the year you turned 18. Banks, credit unions, trust companies and insurance companies can all issue TFSAs, and you can hold more than one, with one combined room limit.

2026 room. The 2026 limit is $7,000. Unused room carries forward with no end date, so someone who has been 18 or older and resident every year since 2009 and never contributed has $109,000 of room. Newcomers build room only from the year they become resident, and they get that full year’s limit. No new room builds in a year you are a non-resident.

Tax in, during and out. Contributions are not deductible. Interest, dividends and capital gains earned inside are not taxed, and withdrawals are tax-free at any time and for any reason. Withdrawals are not income, so they do not raise the net income used to work out income-tested benefits. Two exceptions: US dividends lose 15% to US withholding, and someone who trades with the frequency and skill of a professional can have the income taxed as business income.

The rules that cost people money. A withdrawal is added back to your room only on January 1 of the next year. Withdraw and redeposit in the same year and you may over-contribute, which is taxed at 1% a month on the highest excess, with no grace amount. Moving money between TFSAs by direct transfer avoids that. A non-qualified investment is taxed at 50% of its value.

Leaving Canada, and death. A non-resident can keep a TFSA and withdraw from it without Canadian tax, but earns no new room, and any contribution made while non-resident is taxed at 1% a month until it is withdrawn. When the holder dies, only a surviving spouse or common-law partner can be named successor holder and take over the account as it stands. Anyone else is named as a beneficiary and receives the value at death tax-free, while earnings after the death are taxable.

Use this calculator to add up your own TFSA room from your birth year and residency history.

2. RRSP and Spousal RRSP: A Deduction Now, Tax Later

Room. Your RRSP deduction limit is 18% of your previous year’s earned income, up to $33,810 for 2026 ($35,390 for 2027), minus any pension adjustment from a workplace pension, plus unused room from earlier years. Please check your latest notice of assessment for your exact figure before you contribute. You can be over by up to $2,000 without penalty if you were 18 or older in the previous year; above that the excess is taxed at 1% a month.

Tax in, during and out. Contributions are deductible, which lowers your taxable income, so the tax saved depends on your marginal rate. Growth is not taxed while it stays in the plan. Every withdrawal is taxable income, and the institution withholds tax up front: 10% up to $5,000, 20% over $5,000 up to $15,000 and 30% over $15,000 outside Quebec. In Quebec the federal part is 5%, 10% or 15%, with provincial tax withheld on top.

Deadlines and age 71. Contributions made by the 60th day of a year can be deducted for the year before. For the 2025 tax year the deadline was March 2, 2026; for 2026 it is March 1, 2027. December 31 of the year you turn 71 is the last day to contribute to your own RRSP. By then you must withdraw it, transfer it to a RRIF or buy an annuity.

Tax-free borrowing. The Home Buyers’ Plan lets a first-time buyer withdraw up to $60,000 without tax and repay it over 15 years. The Lifelong Learning Plan allows $10,000 a year, up to $20,000, for full-time education for you or your spouse, repaid over 10 years. A missed repayment is added to your income.

Spousal RRSP. You contribute and claim the deduction, using your own room, but your spouse or common-law partner owns the plan. In retirement, withdrawals are taxed in their hands, which can even out two incomes. If your spouse withdraws money you contributed in that year or either of the two previous years, the withdrawal is generally taxed to you instead. You can keep contributing to a spousal RRSP until the end of the year your spouse turns 71, even after you pass 71.

3. FHSA: Tax-Free Savings for a First Home

Who can open one. A resident of Canada who is at least 18 (19 where that is the age of majority), no older than 71 at December 31 of the year the account is opened, and a first-time home buyer. That means neither you nor your current spouse or common-law partner owned and lived in a home in the current year before opening or in the previous four calendar years.

Room. Room starts only when you open your first FHSA: $8,000 that year and $8,000 each year after, up to $40,000 for life. Up to $8,000 of unused room carries forward, so the most you can add in one year is $16,000. Unlike an RRSP, the contribution deadline is December 31, with no 60-day period. Room builds from the year you open the account, so opening early matters even if you cannot contribute yet.

Tax in, during and out. Contributions are deductible like an RRSP, and you can carry the deduction forward to a higher-income year, even after the account closes. Growth is not taxed. A qualifying withdrawal for a first home is tax-free, which makes the FHSA the only account that is deductible going in and tax-free coming out. You need a written agreement to buy or build with completion before October 1 of the year after the withdrawal, and you must plan to live in the home within one year.

If you never buy. You can transfer the balance to an RRSP or RRIF without tax and without using RRSP room, or withdraw it as taxable income. The account must close by December 31 of the year of the earliest of its 15th anniversary, your 71st birthday or the year after your first qualifying withdrawal. Over-contributions are taxed at 1% a month. You can use the FHSA and the Home Buyers’ Plan for the same home.

4. RESP: Grants for a Child’s Education

Limits. You can contribute up to $50,000 over a child’s lifetime across all RESPs for that child. There has been no annual limit since 2007. Over-contributions are taxed at 1% a month. Contributions can continue until the year of the plan’s 31st anniversary, and the plan must close by the end of the year of its 35th anniversary.

Grants. The Canada Education Savings Grant adds 20% of the first $2,500 contributed each year, or $500, up to $7,200 per child. Unused grant room carries forward, so up to $1,000 can be paid in one year. Families with adjusted family net income below $58,523 get an extra $100 a year on the first $500, and those from $58,523 up to $117,045 an extra $50. The Canada Learning Bond adds up to $2,000 for lower-income families with no contribution needed. British Columbia adds a one-time $1,200, and Quebec adds 10% of contributions, up to $250 a year or $500 with unused room, plus up to $50 for lower incomes. Grants stop after the year the child turns 17.

Tax in, during and out. Contributions are not deductible. Growth and grants are not taxed inside the plan. When the child studies, your own contributions can be returned to you without tax, and the grants and growth are paid to the student as educational assistance payments, which the student reports as income. Educational assistance payments are capped at $8,000 in the first 13 consecutive weeks of full-time study.

If the child does not study. Grants must be returned. Once conditions on the plan’s age and the beneficiaries are met, growth can be paid to the subscriber as an accumulated income payment, taxed at your normal rate plus an extra 20% (12% in Quebec). Up to $50,000 of it can go into your RRSP instead if you have the room, which avoids the extra tax. A family plan can name several children related to you by blood or adoption, so savings can follow whichever child studies.

5. RRIF: Turning an RRSP Into Retirement Income

When you need one. An RRSP must be withdrawn, turned into an annuity or transferred to a registered retirement income fund by December 31 of the year you turn 71. Many people convert earlier to start income. A direct transfer from an RRSP to a RRIF has no tax withheld.

The minimum withdrawal. Each year after the year you open it, you must take at least the January 1 value multiplied by a prescribed factor. At 70 or younger the factor is 1 divided by (90 minus your age), which is 4.00% at 65 and 5.00% at 70. From 71 the factor comes from a fixed chart: 5.28% at 71, 5.82% at 75, 6.82% at 80, 8.51% at 85, 11.92% at 90 and 20.00% at 95 and over. You can elect to use a younger spouse’s age when you set up the RRIF, which lowers the minimum.

Tax. Growth stays tax-deferred, and every payment is taxable income. Tax is withheld only on the part of a payment above the minimum, at the same 10%, 20% and 30% rates as an RRSP lump sum outside Quebec. RRIF income can qualify for the federal pension income amount of up to $2,000 at 65 or older, and up to 50% of it can be split with a spouse when the transferring spouse is 65 or older.

No maximum. A RRIF has no withdrawal cap, so you can take more in a low-income year. Higher withdrawals can push net income above the 2026 OAS recovery threshold of $95,323, above which 15% of the excess is clawed back from your OAS.

6. LIRA and LIF: Locked-In Pension Money

What a LIRA is. A locked-in retirement account holds pension money moved out of a registered pension plan, usually when you leave an employer. Pension law, not just tax law, governs it, so the money is locked in: you generally cannot withdraw it as cash before retirement, and you cannot add new contributions. Some pension laws allow limited early access in set situations; the rules depend on which pension law applies to your plan.

What a LIF is. A life income fund is the payout stage, much as a RRIF is for an RRSP. Under federal pension rules, a LIF must pay at least the same minimum as a RRIF, using the same factors, and before age 90 it also has a maximum set by a formula. From the year you turn 90 there is no maximum. Provincially regulated LIFs follow each province’s pension law, which sets its own maximums.

Tax. A LIRA and a LIF are taxed like an RRSP and a RRIF: growth is tax-deferred and payments are taxable income. LIF payments qualify for pension income splitting when the transferring spouse is 65 or older. Because both are retirement arrangements, US-listed shares held directly in them are exempt from US dividend withholding under the Canada-US tax treaty.

Protection. At a CIPF member dealer, an RRSP, RRIF and LIF fall within one combined $1,000,000 retirement-account coverage group, separate from the $1,000,000 for general accounts and the $1,000,000 for RESPs. Our listing of LIRA accounts shows where you can hold one.

7. Non-Registered Accounts: No Limits, Taxed Every Year

What it is. A non-registered account is an ordinary investment account at a broker, bank or robo-advisor, held in one name or jointly. A cash account holds only what you deposit; a margin account lets you borrow against your investments. There is no contribution limit, no deadline and no restriction on withdrawals, which makes it the place for money after your registered room is used.

Interest. Interest is added to your income every year at your full marginal rate, whether or not you withdraw it. For an Ontario resident with $75,000 of taxable income in 2026, that rate is 29.65% (20.5% federal plus 9.15% Ontario), so a 5% interest rate keeps 3.5175% after tax.

Dividends. Dividends from Canadian companies are grossed up and then reduced by a dividend tax credit. Eligible dividends are grossed up by 38% and earn a federal credit of 15.0198% of the grossed-up amount; other than eligible dividends are grossed up by 15% with a 9.0301% federal credit. Provinces add their own credits.

Capital gains and losses. Only part of a capital gain is taxed, and only when you sell, so tax on growth can be deferred for years. A net capital loss can be carried back three years or forward with no time limit, against capital gains only. The superficial loss rule denies a loss if you or an affiliated person buy the same property within 30 days before or after the sale and still hold it 30 days later.

US dividends. The 15% US withholding is not lost here. You report the full dividend and claim a foreign tax credit, which is the lesser of the foreign tax paid and the Canadian tax on that income. The capital gains tax calculator estimates the tax on a sale.

8. Types of Investment Accounts Compared: Registered vs Non-Registered

This table puts every account type side by side on who can open it, the 2026 limit and the tax treatment at each stage. Use it with the account sections above for the details and exceptions.

Registered vs non-registered in one sentence. Registered accounts trade limits and rules for tax savings; a non-registered account trades tax savings for freedom. Most investors use both: registered room first, then a non-registered account for the rest.

TFSA vs RRSP vs FHSA. All three shelter growth. The FHSA is deductible going in and tax-free coming out for a first home, so a first-time buyer usually gets the most from it per dollar. The RRSP is deductible but taxed on the way out, so it works best when your tax rate is higher now than in retirement. The TFSA is never deductible and never taxed, which makes it the most flexible. When your tax rate is the same now and later, an RRSP and a TFSA give the same after-tax result.

9. Which Account Fits Which Goal, and a Common Order

A common order, not a rule. Many Canadians work through their accounts in roughly the order below. It is general information. Your workplace plan, debts, benefits and tax rate can change the order, and the account chooser at the top of this page shows how your goal and income shift it.

1. Build an emergency fund in a savings account or a TFSA holding cash or GICs.
2. Pay down high-interest debt, which costs more than most investments earn.
3. Collect any employer matching in a group RRSP or pension plan.
4. If you are a first-time buyer, open an FHSA and contribute up to $8,000 a year.
5. Split new savings between a TFSA and an RRSP based on your tax rate now and later; the account chooser treats a marginal rate of 30% or more as the point where the RRSP deduction becomes more valuable.
6. If you have children, contribute at least $2,500 a year per child to an RESP to collect the full basic grant.
7. Once registered room is used, invest the rest in a non-registered account.

10. US Stocks in Each Account: Withholding Table

The basic rule. The United States withholds tax on dividends it pays to Canadian residents. With a W-8BEN form on file with your broker, the Canada-US tax treaty cuts the rate to 15%; without one, it is 30%. The treaty exempts arrangements operated to provide retirement income, which is why the account you hold US shares in matters.

What the table means in dollars. This example is hypothetical. On $1,000 USD of US dividends a year, a TFSA loses $150 USD to withholding (15% x $1,000) for good, while an RRSP holding the same US-listed shares directly loses nothing. In a non-registered account the $150 is withheld but can be credited against Canadian tax on that income.

Held directly. The exemption applies to US-listed securities held directly in the account. Funds that hold US shares for you are treated differently, because the withholding happens inside the fund. Our guide to US stocks in a TFSA explains the layers, and the guide to buying US stocks from Canada walks through the account and commission choices step by step.

US dollar accounts. Some platforms let a TFSA or RRSP hold US dollars, and a few charge a fee for it. As of October 22, 2026, Questrade lets registered accounts hold US dollars with no separate fee listed, Wealthsimple charges $10 plus tax a month for a USD account on its Core tier (included on Premium and Generation), and Qtrade charges US$15 a quarter for each USD RRSP, RRIF or TFSA (free with Investor Plus). The listings below compare which providers offer them and what a US trade costs.

11. Where to Open Each Account

Online brokers. A self-directed account at an online broker lets you buy shares, exchange-traded funds, bonds and GICs yourself. All 13 online brokers we track offer the TFSA and RRSP. Two of them do not offer the FHSA, and several do not list RESPs, LIRAs or US dollar registered accounts. Costs to compare are trading commissions, options fees, any USD account fee and other account fees. Our online broker comparison lists each one’s published pricing and account types.

Robo-advisors. A robo-advisor builds and rebalances a portfolio for you for a yearly management fee on top of the funds’ own costs. It suits investors who want the account handled for them. See the robo-advisor comparison for fees at different balances.

Banks and credit unions. Banks, credit unions and trust companies offer registered savings accounts and GICs, and branch advisors sell mutual funds. Eligible deposits and GICs at a CDIC member are insured up to $100,000 per category, and each registered account type is its own category. Credit unions use provincial deposit insurance instead.

Safety checks. Investment dealers in Canada are overseen by CIRO, the Canadian Investment Regulatory Organization, and CIPF members are CIRO members. CIPF protects up to $1,000,000 of missing property in general accounts (cash, margin, TFSA and FHSA combined), a separate $1,000,000 for retirement accounts and another for RESPs, if a member firm fails. It does not cover market losses or crypto assets.

How we compare providers. This page does not rank providers, and our editorial standards explain how we check every figure on it. Our comparison pages show each provider’s published costs and features, and our broker rating methodology explains how scores are built. Our advertiser disclosure explains how WealthScale is paid.

1. Pick the account type from the sections above, based on your goal.
2. Decide whether you want to choose investments yourself or have a robo-advisor or advisor do it.
3. Check that the provider offers every account you need, including FHSA, family RESP, spousal RRSP or US dollar accounts.
4. Compare the total yearly cost: commissions, management fees, fund costs and account fees.
5. Confirm the provider is a CIRO member covered by CIPF, or a CDIC member for deposits.
6. Move existing registered money by direct transfer, never by withdrawing and redepositing, so you keep your room.

Meet the Experts Behind WealthScale

Sharad Gondaliya, CPAWriter and tax reviewerCPA Ontario No. 61040184

Sharad is a CPA Ontario member (No. 61040184) and a Certified Public Accountant licensed in Washington and Montana, with more than 15 years in accounting and tax, a Diploma in Banking and Finance and a Certificate in Small Business Finance. He checks WealthScale content against primary sources. WealthScale is independent of his firm, Gondaliya CPA Professional Corporation, and provides general information only, not personal financial, investment, tax or legal advice.

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Neha Gupta is a CFA charterholder based in Winnipeg who has worked in financial markets since December 2005. She has published more than 2,600 investment articles and is Head of Operations and Finance at Whiteland Real Estate. She reviews WealthScale’s investing pages for accuracy.

• CFA charter, CFA Institute (awarded 2023)
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