# RRSP, TFSA and FHSA: how the three accounts compare for tax

Source: https://canadataxdesk.com/registered-accounts
Publisher: Canada Tax Desk (canadataxdesk.com), independent editorial site
Topic: RRSP, TFSA and FHSA
Last updated: 2026-10-22

> For 2026, the RRSP dollar limit is $33,810, the TFSA annual limit is $7,000 and the FHSA annual limit is $8,000 (CRA). RRSP and FHSA contributions are deductible; TFSA contributions are not. RRSP withdrawals are taxed, while TFSA withdrawals and qualifying FHSA withdrawals for a first home are tax-free. All three charge 1% per month on excess amounts.

## Key facts

- 2026 RRSP dollar limit: $33,810 (2027: $35,390)
- 2026 TFSA annual limit: $7,000; 2027 not yet announced
- FHSA annual / lifetime limit: $8,000 / $40,000
- RRSP deadline for 2026: March 1, 2027 (calculated 60th day)
- Over-contribution tax: 1% per month on the excess (RRSP: above a $2,000 cushion)

## How do an RRSP, TFSA and FHSA differ for tax?

The RRSP, TFSA and FHSA differ mainly in when you get the tax break. A Registered Retirement Savings Plan (RRSP) gives you a deduction now and taxes the money when you take it out. A Tax-Free Savings Account (TFSA) gives no deduction, but growth and withdrawals are tax-free. A First Home Savings Account (FHSA) combines both: contributions are deductible and a qualifying withdrawal to buy a first home is not taxed.

All three are registered with the Canada Revenue Agency (CRA), which tracks your room from the slips and records your financial institution files. Investment income earned inside any of them is not reported on your return while it stays in the account.

| Feature | RRSP | TFSA | FHSA |
| --- | --- | --- | --- |
| Contribution deductible? | Yes, line 20800 | No | Yes, reported on Schedule 15 |
| Withdrawals taxed? | Yes, added to income | No | No, if qualifying; otherwise yes |
| 2026 new room | 18% of 2025 earned income, up to $33,810 | $7,000 for everyone 18+ who is resident | $8,000 |
| Lifetime cap | None | None (room keeps growing) | $40,000 |
| Room comes back after a withdrawal? | No (HBP repayments aside) | Yes, on January 1 of the next year | No |
| Age limit | Contribute to your own plan until December 31 of the year you turn 71 | None after 18 | Open by the year you turn 71 |

RRSP vs TFSA vs FHSA at a glance (2026 tax year)

## What are the 2026 limits side by side?

The 2026 dollar limits are $33,810 for the RRSP, $7,000 for the TFSA and $8,000 for the FHSA, according to the CRA's published limits. These are ceilings, not your personal room: your actual space in each account depends on your income, age, past contributions and when you opened the account.

| Year | RRSP dollar limit | TFSA annual limit | FHSA annual limit |
| --- | --- | --- | --- |
| 2024 | $31,560 | $7,000 | $8,000 |
| 2025 | $32,490 | $7,000 | $8,000 |
| 2026 | $33,810 | $7,000 | $8,000 |
| 2027 | $35,390 | Not yet announced (usually November) | $8,000 |

Published dollar limits by year

The RRSP figure for 2027 is already fixed at $35,390, but the 2027 TFSA limit has not been published as of October 22, 2026. The CRA is expected to publish it in November 2026, together with the other indexed 2027 amounts such as the tax brackets and the basic personal amount. See the full year-by-year history on our [TFSA contribution limit](https://canadataxdesk.com/registered-accounts/tfsa-contribution-limit) page and the calculation behind your RRSP number on the [RRSP contribution limit](https://canadataxdesk.com/registered-accounts/rrsp-contribution-limit) page.

### CRA RRSP contribution limits in plain terms

Your 2026 RRSP deduction limit is the lesser of 18% of your 2025 earned income or $33,810, plus unused room carried forward, minus any pension adjustment from a workplace pension. You need 2025 earned income of about $187,834 to earn the full $33,810 in new room.

### The TFSA room limit if you never contributed

Someone who was 18 or older and resident in Canada in 2009 and has never contributed has $109,000 of TFSA room in 2026. That is the sum of every annual limit from 2009 to 2026. Your own number is lower if you turned 18 after 2009, arrived in Canada later, or have already contributed.

## Where do I find my contribution room?

Your RRSP deduction limit and FHSA participation room are printed on your latest notice of assessment, and all three accounts show room in CRA My Account. The TFSA figure in My Account is your room as of January 1 and does not reflect contributions or withdrawals you made this year. The CRA itself says the TFSA information in your CRA account is updated only once a year, in the spring, and tells you to use your own financial records to work out your available room.

1. Sign in to CRA My Account and open the RRSP, TFSA and FHSA sections.
2. For the RRSP, compare the deduction limit with the RRSP deduction limit statement on your latest notice of assessment.
3. For the TFSA, open the transaction summary to see what your issuers reported. Financial institutions report the prior year's activity by the end of February, so recent transactions may be missing.
4. Subtract any contributions you made since January 1 yourself. Form RC343, Worksheet: TFSA contribution room, walks through the TFSA math.
5. Or, once signed in, use the CRA's TFSA contribution room calculator under View TFSA details, then Contribution room, and enter the transactions it has not received yet.
6. For the FHSA, check the participation room shown on the notice of assessment for the year after you opened the account.

> **My Account can be out of date:** The CRA figure is only as current as the last records it received. If you moved money between TFSAs by withdrawing and re-depositing instead of using a direct transfer, My Account will not warn you, but the CRA will later count the re-deposit as a new contribution.

## What are the deadlines for each account?

Only the RRSP has a deadline after year end. Contributions made in the first 60 days of 2027, up to March 1, 2027, can be deducted on your 2026 return. That date is the calculated 60th day; the CRA normally confirms it in January. Full details are on our [RRSP deadline 2027](https://canadataxdesk.com/registered-accounts/rrsp-contribution-deadline) page.

- **RRSP:** 60 days after December 31 for the prior-year deduction; your own plan must stop taking contributions after December 31 of the year you turn 71.
- **TFSA:** no deadline. Room simply accumulates and carries forward indefinitely.
- **FHSA:** contributions must be made between January 1 and December 31 to count for that year. There is no 60-day window.
- **Tax return:** April 30, 2027 for most people filing 2026 returns (June 15, 2027 if you or your spouse is self-employed, with payment still due April 30).

## What happens if I over-contribute?

Each account charges a 1% monthly tax on excess amounts, but the details differ. The RRSP allows a $2,000 lifetime cushion before the tax starts; the TFSA and FHSA have no cushion. In each case the fastest fix is to remove the excess, because the tax runs for every month it stays in.

| Account | Tax | Return to file | Filing deadline |
| --- | --- | --- | --- |
| RRSP | 1% per month on excess above $2,000 | T1-OVP | 90 days after the end of the year |
| TFSA | 1% per month on the highest excess in the month | RC243 and Schedule A (RC243-SCH-A) | June 30 of the following year |
| FHSA | 1% per month on the highest excess in the month | RC728 and Schedule A (RC728-SCH-A) | June 30 of the following year |

Over-contribution rules compared

Step-by-step fixes and waiver requests are covered on our [TFSA over-contribution penalty](https://canadataxdesk.com/registered-accounts/tfsa-over-contribution-penalty) and [RRSP over-contribution](https://canadataxdesk.com/registered-accounts/rrsp-over-contribution) pages. An FHSA excess can be removed tax-free with a designated withdrawal or transfer using Form RC727, and it shrinks on January 1 when new room arrives. For the RRSP, the CRA can waive or cancel the 1% tax if the excess came from a reasonable error and you are taking reasonable steps to remove it; you ask in writing with Form RC2503.

## RRSP vs TFSA: which should you use first?

The RRSP vs TFSA choice mostly comes down to your tax rate now compared with your expected tax rate when you withdraw. The RRSP wins when your rate today is higher than it will be in retirement. The TFSA wins when your rate is low now, or when you may need the money before retirement.

Two practical points often decide it. RRSP withdrawals are added to net income, which can reduce income-tested benefits and credits later; TFSA withdrawals are not. And an RRSP withdrawal permanently uses up that room, while a TFSA withdrawal is added back the following January. Our page on [RRSP withdrawal tax](https://canadataxdesk.com/registered-accounts/rrsp-withdrawal-tax) shows the withholding rates on early withdrawals.

## How do the accounts work together to buy a first home?

A first-time buyer can use an FHSA qualifying withdrawal and a Home Buyers' Plan (HBP) withdrawal from an RRSP for the same home, as long as the conditions for each are met at the time of each withdrawal (CRA, What is the Home Buyers' Plan). The HBP limit is $60,000 per person, and the FHSA lifetime limit is $40,000 plus growth.

- **FHSA:** a qualifying withdrawal never has to be paid back. See our [FHSA rules](https://canadataxdesk.com/registered-accounts/fhsa-rules-canada) guide for the conditions and Form RC725.
- **HBP:** money borrowed from your RRSP must be repaid over 15 years. For withdrawals from 2026 to 2028, repayments start in the fifth year after the first withdrawal. The HBP limit and repayment rules are set out on the CRA's Home Buyers' Plan page.
- **TFSA:** any amount can be withdrawn tax-free for any purpose, including a down payment, and the room returns the next year.
- **Home buyers' amount:** a separate non-refundable credit of up to $10,000 on line 31270, worth up to $1,400 federally for 2026.

For a couple who both qualify, the combined ceiling is large: $80,000 in two FHSAs plus up to $120,000 through two HBP withdrawals, before counting TFSA savings. Our [Home Buyers' Plan vs FHSA](https://canadataxdesk.com/registered-accounts/home-buyers-plan-vs-fhsa) comparison explains which to fund first.

## Common questions

### Can I have an RRSP, TFSA and FHSA at the same time?

Yes. There is no rule against holding all three, and each has its own separate room. Many first-time buyers contribute to an FHSA for the deduction and keep a TFSA for flexible savings.

### Is TFSA room the same for everyone?

No. The annual limit is the same for everyone ($7,000 in 2026), but total room depends on the year you turned 18 or became a resident, what you contributed, and what you withdrew. Room only starts building once you are 18, resident and have a valid social insurance number.

### When will the 2027 TFSA limit be announced?

As of October 22, 2026 the CRA has not announced the 2027 TFSA dollar limit; the 2026 limit is $7,000. The 2027 figure is part of the CRA's yearly indexation update, which is expected in November 2026. The 2027 RRSP dollar limit is already set at $35,390, and the FHSA annual limit is $8,000.

### Does my RRSP room depend on my income?

Yes. New RRSP room each year is 18% of the previous year's earned income, capped at the dollar limit, and reduced by any pension adjustment. With no earned income, you get no new RRSP room, although unused room from earlier years carries forward.

### Do FHSA contributions in January count for last year?

No. Unlike the RRSP, the FHSA has no 60-day rule. A contribution made in January 2027 counts toward 2027 participation room and can be deducted on the 2027 return or a later one.

### Which account should I use if I earn under $50,000?

At lower incomes the RRSP deduction saves less tax, so many people favour the TFSA, or the FHSA if they plan to buy a first home, since the FHSA gives a deduction and a tax-free withdrawal. The right choice depends on your expected future income; this page is general information, not personal advice.

## Sources

- [MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE](https://www.canada.ca/en/revenue-agency/services/tax/registered-plans-administrators/pspa/mp-rrsp-dpsp-tfsa-limits-ympe.html)
- [Calculate your TFSA contribution room](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/contributing/calculate-room.html)
- [Participating in your FHSAs](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/contributing-your-fhsa.html)
- [What happens if you contribute or transfer too much to your FHSAs](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/what-happens-contribute-transfer-too-much.html)
- [What is the Home Buyers' Plan](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html)
- [Excess contributions (RRSP)](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/contributing-a-rrsp-prpp/what-happens-you-over-your-rrsp-prpp-deduction-limit.html)