A Pocket Guide to TFSAs vs RRSPs
By Alterna Team
February 11, 2022

You’ve likely heard of both a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP) . They are both excellent ways to invest and save your money with the added bonus of providing tax breaks, but what else do you know about them?

Here are the key differences between these two accounts.



Tax Benefits

  • Dividends, interest, and capital gains earned in a TFSA are 100% tax-free
  • Tax deductions for contributions
  • Interest earned on RRSP investments are tax-free

Access to your funds

  • Withdraw funds at any time tax-free
  • Money withdrawn from a TFSA can be added back in the future
  • Withdraw funds at any time but pay tax on those funds
  • Money withdrawn from an RRSP can’t be re-added unless it’s part of a particular program, such as the government Home Buyer’s Plan or Lifelong Learning plan


  • TFSA’s never expire
  • RRSPs must be converted to a RRIF or annuity before December 31 of the year when you turn 71

Contribution Limit

  • The current annual contribution limit is $6,500. Unused contribution space carries forward to the following year
  • The current annual RRSP contribution limit is 18% of your taxable income, to a maximum of $30,780
  • Unused contribution space carries forward to the following year

Spousal Plan

  • Not available
  • You can contribute directly to a spousal RRSP

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Updated: February 2023