TFSA and RRSP: what is the difference?

HomeInvestment and RetirementTFSA and RRSP: what is the difference?

Choosing the plan that fits your situation is sometime complex. Your financial advisor is here to help you make an informed choice.

Differences between TFSAs & RRSPs


Contribution dates January 1 to December 31 February 29
Minimum age 18 years old None
Maximum age None 71 years old
Contribution room Per year:
  • $10,000 in 2015
  • $5,500 in 2016 
18% of earned income for the previous year up to:
  • $24,930 in 2015
  • $25,370 in 2016
Can we carry forward unused déductions? Yes, for an unlimited time. Yes, until your 71st birthday year.
Do we have to earn income to contribute? No Yes
Are contributions deductible from taxable income? No Yes
Do we have to pay tax if we withdraw an amount? No, withdrawals are tax-free. Yes, withdrawals are added to your taxable income for the same year.
Is investment income taxable? No No
What is the available contribution room? Unused amount of your annual contribution room accumulated since 2009. Unused amount of your annual contribution room accumulated since 1991.
Are we penalized if we contribute too much? Yes. A penalty of 1% per month. Yes. A penalty of 1% per month if your lifetime contribution surplus is higher than $2,000.
Are withdrawn amounts added to our contribution room? Yes. Available withdrawn amounts are added to the contribution room for the next year. No
Can we contribute to our spouse’s account? No. Amounts transferred to your spouse to contribute a TFSA are not subject to attribution rules. Yes. To be noted that the contributor benefits from the deduction in the calculation of their taxable income even if they are not the beneficiary.
Is there tax to refund upon death? No. Accumulated amounts until death can be transferred to the spouse without any impact. Yes. Except in case of a transfer to the spouse, a minor child or handicapped child.
Can we use this amount as a security for a loan? Yes No
Do we have to convert it at a certain age? No Yes, before your 71st birthday, you must convert your RRSP to a RRIF, buy an annuity or deregister your plan.