Savings2 min read · Updated October 21, 2026
RRSP or TFSA: which should you use first?
A plain comparison of the RRSP and TFSA with a worked example, and the one thing that decides it: your tax rate now and later.
How each works
RRSP: you get a tax refund now and pay tax when you withdraw. TFSA: no refund now, no tax later.
Worked example
| Account | After tax in 25 years |
| RRSP | $25,398 |
| TFSA | $23,704 |
Limits
TFSA $7,000 a year. RRSP 18% of income up to $33,810. See the limits guide.
Common questions
Should I use an RRSP or a TFSA?
RRSP if your tax rate is higher now than it will be later. TFSA if it is lower. Equal rates give equal results.
Can I use both?
Yes. Many people use both, and the FHSA for a first home.