TFSA vs. RRSP: What’s the Difference?
Comparing account features
- Primary Use - RRSPs are typically used to save for retirement. TFSAs are typically used to save for any purpose.
- Eligibility - You can contribute to an RRSP after you start earning income from employment or certain other sources. To open a TFSA at TD, you must be the age of majority in your province or territory of residence.
- Contribution Limit - The 2019 and 2020 contribution limit for a TFSA is $6,000. Your 2020 RRSP contribution limit, on the other hand, is 18% of your earned income reported on your 2019 tax return or $27,230 – whichever is lower, subject to certain adjustments.
- Unused Contribution Room - Your unused contribution room is carried forward for RRSPs & TFSAs.
- Withdrawals - RRSP withdrawals are taxable, subject to certain exceptions. With a TFSA, you can withdraw money any time, tax-free!1
- Withdrawn Amounts - When withdrawing funds from an RRSP, your contribution room is lost for amounts you withdraw subject to certain exceptions. For a TFSA, withdrawn amounts are added back to your contribution room in the following year.
- Taxation - Contributions made to your TFSA are not tax-deductible. RRSP contributions are tax - deductible. This means any contributions you make may reduce the amount of tax you pay on your personal income.
- Plan Maturity - An RRSP matures at the end of the calendar year in which you turn 71. There is no upper age limit for a TFSA.
- Spousal Plan - You can contribute directly to a spousal RRSP. There are no spousal TFSAs.
Saving for retirement
Saving for a home down payment
See what types of RRSPs TD offers
Start saving for what’s essential to you.
Open a RRSP or TFSA with TD and start saving for your retirement.
Ways to apply
Apply for a TFSA
Fill out an online TFSA application if you already have a TD Canada Trust chequing or savings account
Book an appointment
Meet a banking specialist in person at the branch closest to you.
Our banking specialists are ready to answer your questions and can assist you in opening your RRSP.