Tax guides › TFSA, RRSP and RESP
A TFSA, an RRSP and an RESP each do a different job, and none of them is the answer to everything. These guides explain the rules for each, how they interact with tax and benefits, and what happens to them when someone dies.
We explain the tax side. We do not provide investment advice or recommend products.
They solve different problems. A TFSA holds money you have already paid tax on; it grows tax-free and comes out tax-free, and withdrawals do not affect benefits.
The basic grant is 20% of the first $2,500 contributed each year, so $500 a year, up to $7,200 in a child's lifetime.
Your RRSP deduction limit is personal. It is 18% of your previous year's earned income, up to the annual ceiling ($33,810 for 2026).
An RRSP deduction reduces net income on line 23600. The Canada child benefit and BC family benefit are calculated from adjusted family net income, which starts with that line.
A spousal RRSP lets the higher-income spouse contribute, within their own room, to a plan the other spouse owns, and take the deduction.
Seven rules. Your room is the current year's limit plus unused room plus last year's withdrawals minus this year's contributions, so it is personal.
Neither is better in general. An RRSP contribution is deducted from income now and the withdrawal is taxed later.
Each account is treated differently. A TFSA passed to a spouse named as successor holder stays tax-free.
Call us or request a callback. Help is available in English and Punjabi.
