Skip to content

Find a question

Can’t find what you’re looking for? Ask us a new question!

What is the difference between an RRSP, TFSA or non-registered investment account?

Categories:

Tags:

Our response:

Both Registered Retirement Savings Plans (RRSP) and Tax-Free Savings Accounts (TFSA) offer tax advantages to help you reach your savings goals. The main differences are:

  • An RRSP is usually used for retirement savings. A TFSA can be for any type of savings goal.
  • Your RRSP contributions are tax deductible. TFSA contributions are not. You need earned income to contribute to an RRSP but not to a TFSA.
  • You pay tax on your RRSP withdrawals because you contribute with pre-tax dollars. TFSA withdrawals are tax free because you made the contributions with after-tax dollars.
  • You must close your RRSP the year you turn 71. At that time, you have to use your savings to buy either a RRIF or an annuity. With a TFSA, you don’t have to stop contributing, or close it, at a certain age.

Non-registered investment accounts have no special “tax status”. All investments held in non-registered accounts are subject to tax. Find out more about investors and tax. Speak to your registered financial advisor or tax professional about your options.

Can’t find what you’re looking for?

Close
Copy the URL to share:

Close
  Share the site: