RRSP, TFSA, RESP & FHSA
The account you hold a fund in often matters more than the fund itself. Registered accounts shelter growth from tax — over decades that's worth more than most investment decisions.
TFSA — the flexible one
Contribute with after-tax dollars; all growth and withdrawals are tax-free, forever. Annual room (indexed; $7,000 in 2026-era dollars) accumulates from age 18 and withdrawals restore room the following year. Best default for most goals. One warning: it's a savings account type, not a savings account — fill it with investments, not idle cash.
RRSP — the tax-deferral engine
Contributions are tax-deductible (room = 18% of earned income up to an annual cap); growth compounds untaxed; withdrawals are fully taxable income — ideally in lower-income retirement years. The win equals your tax-rate spread between contribution and withdrawal. Bonus doors: Home Buyers' Plan and Lifelong Learning Plan. Converts to a RRIF by the end of the year you turn 71.
FHSA — the first-home rocket
The best of both: deductible going in, tax-free coming out for a qualifying first home. $8,000/year room, $40,000 lifetime, must be used within 15 years of opening (or rolled into your RRSP without using RRSP room). If a first home is plausibly in your future, open one early to start the clock.
RESP — the education matcher
No deduction, but the government adds the CESG: 20% on the first $2,500/year per child (to $7,200 lifetime). A guaranteed 20% return before the market does anything. Growth and grants are taxed in the student's (usually near-zero) hands at withdrawal.
Which first?
- Employer match in a group plan (free money).
- FHSA if a first home is on the menu.
- RESP to the grant max if you have kids.
- TFSA vs RRSP: higher income now than expected in retirement → RRSP; lower → TFSA. When unsure, TFSA.