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Investing Tables

Investing Tables

Differences between a TFSA and an RRSP

You can get the same tax-free growth protection within a TFSA or an RRSP, but there are differences.

RRSP TFSA
Eligibility Anyone who earned income subject to Canadian taxation, including non-residents Any Canadia​n resident age 18 or over
Maximum annual
contribution limit
Your allowable RRSP contribution for the current year is the lower of:
  • 18% of your earned income from the previous year
  • The maximum annual contribution limit for the taxation year
  • The remaining limit after any company-sponsored pension plan contributions
$5,500 per year1
Contributions are
tax deductible
Yes No
Investment gains are taxed
(interest, dividends, and capital gains)
Yes, it grows tax free while invested but is taxable at your marginal tax rate when withdrawn No
Withdrawals are taxed Yes, unless withdrawn using the Home Buyers Plan (HBP)2and the Lifelong Learning Plan (LLP)3 No
Unused contribution room
can be carried forward
Yes Yes
Withdrawals can be
re-contributed in future years
No, unless withdrawn using the HBP or LLP Yes4
Contribution limit may be
reduced by employer pension plan contributions
Yes No
Implications when you
reach age 71
Four options:
  • Withdraw your RRSP as taxable income
  • Transfer it to a Registered Retirement Income Fund (RRIF) on or before December 31 of the year you turn 71
  • Purchase an annuity that guarantees payments for a fixed term or as long as you live
  • Do a combination of any of the above
None
Disclai​mer Information
1 The $10,000 TFSA annual contribution limit is effective January 1, 2015. Previous limits were $5,000 (2009-2012) and $5,500 (2013-2014).
2 HBP allows you to withdraw up to $25,000 to buy or build a home for yourself or a relative with a disability.
3 LLP allows you to withdraw money to finance training or education for you, your spouse, or your common-law partner.
4 TFSA withdrawal amounts cannot be re-contributed in the same year.
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