TFSA, FHSA and RESP: Canada's other registered accounts
An RRSP is only one of four main registered accounts in Canada. The TFSA, FHSA and RESP each shelter investment growth from tax, but they differ in who can open them, whether you get a deduction, and what happens to the tax when the money comes out.
Tax-Free Savings Account (TFSA)
A TFSA is a general-purpose account for anyone 18 or older who is resident in Canada and has a Social Insurance Number. Contributions are not deductible, but interest, dividends and capital gains grow tax-free and withdrawals are not taxed. You can take money out for any reason, and the amount you withdraw is added back to your room on January 1 of the next year. The 2026 limit is $7,000. Full details: how the TFSA works.
First Home Savings Account (FHSA)
The FHSA is for first-time home buyers. It combines the best tax features of the RRSP and TFSA: contributions are deductible like an RRSP, and a qualifying withdrawal to buy a first home is tax-free like a TFSA. You can put in $8,000 a year, up to $40,000 in your lifetime. Money you don't use for a home can move to your RRSP without using RRSP room. Full details: how the FHSA works.
Registered Education Savings Plan (RESP)
An RESP is a savings plan for a child's education after high school. Contributions are not deductible, but the federal government adds the Canada Education Savings Grant (CESG) of 20% on the first $2,500 a year, and low-income families can get the Canada Learning Bond with no contribution at all. Growth and grants are taxed in the student's hands when paid out, usually at a low rate. Full details: RESP basics and RESP grants.
Side-by-side comparison
| Account | Deduction for contributions? | Tax on withdrawal? | 2026 limit | Who it's for |
|---|---|---|---|---|
| RRSP | Yes | Yes, taxed as income | 18% of 2025 earned income, up to $33,810 (minus pension adjustment) | Anyone with earned income, until the end of the year they turn 71 |
| TFSA | No | No | $7,000 (plus unused room and last year's withdrawals) | Residents 18 and older with a SIN |
| FHSA | Yes | No, if it is a qualifying withdrawal for a first home | $8,000 a year, $40,000 lifetime | First-time home buyers, 18 (19 in some provinces) to 71 |
| RESP | No | Contributions come back tax-free; grants and growth are taxed to the student | $50,000 lifetime per child; no annual limit | Parents, grandparents and others saving for a child's education |
Which one first?
There is no single right order. A few general patterns:
- Saving for a first home: the FHSA usually comes first, because you get a deduction going in and pay no tax coming out. It can be combined with the RRSP Home Buyers' Plan.
- Children's education: contributing at least $2,500 a year to an RESP collects the full $500 basic grant, a 20% return before any investment growth.
- Retirement, higher income now: the RRSP deduction is worth more when your tax rate today is higher than it will be in retirement. See do you need an RRSP?
- Retirement, lower income now, or flexible savings: the TFSA often fits better, and TFSA withdrawals do not reduce income-tested benefits such as Old Age Security or the Guaranteed Income Supplement.
The figures above change every year. Your personal RRSP, TFSA and FHSA room is shown in your CRA account.
Pages in this section
- TFSAThe 2026 TFSA limit is $7,000 and total room since 2009 is $109,000. How room builds, why withdrawals come back only on January 1, and how to avoid the 1% penalty.
- FHSAThe FHSA lets first-time buyers save $8,000 a year, up to $40,000, with a deduction going in and a tax-free withdrawal for a first home. Rules, deadlines, example.
- RESP basicsHow an RESP works: family, individual and group plans, the $50,000 lifetime limit, how money is paid out and taxed, and what happens if the child doesn't go to school.
- RESP grantsThe CESG adds 20% on $2,500 a year, up to $7,200 per child. 2026 Additional CESG thresholds, the Canada Learning Bond, QESI, BC's $1,200 grant and a worked example.