FHSA, RRSP or TFSA, which one to choose?

Objective

Buying your first home and saving for retirement

General saving

Buying your first home

Eligibility

• Be 71 years of age or younger (as of December 31 of the current calendar year)
• Have earned income in Canada
• Have a permanent or temporary SIN starting with a 9

• Be at least 18 years old (19 in some provinces)
• No income is required to qualify for the amount awarded annually
• Be a Canadian resident

• Be between the ages of 18 and 71 (19 in some provinces)
• No earned income is required to qualify for the $8,000 awarded annually
• Be a Canadian resident
• Not have lived in a home that you or your spouse own in the last 4 calendar years or the year before opening

Number of accounts

An individual may have multiple RRSPs, but the contribution limit applies for all of them.

An individual may have multiple TFSAs, but the contribution limit applies for all of them.

An individual may have multiple FHSAs, but the contribution limit applies for all of them.

Contribution room

• Annual limit of $30,780 in 2023, or 18% of income earned in the previous year
• Contribution room is calculated based on unused contribution room, the previous year's net income, the annual RRSP limit

• Annual limit of $6,500 in 2023
• Unused contribution room is accumulated and carried forward from age 18

• Annual limit of $8,000 (contributions + RRSP transfers)
• Lifetime limit of $40,000

Contribution deductions

Contributions are tax-deductible.

Contributions are not tax-deductible

Contributions are tax-deductible.

Taxation on withdrawals

RRSP withdrawals are taxed. Except for withdrawals for the acquisition of your first home (HBP) or to finance your education (LLP)

You can withdraw money from a TFSA for any purpose tax free

Only eligible withdrawals for the purchase of your first home are not taxed. You can withdraw money from your FHSA for other purposes, but these withdrawals will be taxed.

Withdrawals for the purpose of purchasing property

The HBP limit to help with the acquisition of a first property is $35,000. HBP withdrawals must be repaid to an RRSP over a maximum period of 15 years, beginning in the second year following withdrawal.

N/A

There is no withdrawal limit in the FHSA. Amounts withdrawn from FHSA do not have to be repaid.