Should I open a TFSA or an RRSP first?

If your employer matches group RRSP contributions, take the match first. After that, an RRSP usually wins if your tax rate now is higher than it will be in retirement, and a TFSA if it’s lower or you may need the money sooner.

How much TFSA room do I have in 2026?

The 2026 limit is $7,000, plus any unused room from earlier years. If you were 18 or older and living in Canada in 2009 and have never contributed, your total room is $109,000. Check your exact room in CRA My Account.

Can I invest in stocks and ETFs inside a TFSA or RRSP?

Yes. Despite the name, a TFSA isn’t just a savings account: you can hold stocks, ETFs, mutual funds, bonds and GICs in a TFSA, RRSP or FHSA at a brokerage or bank.

What happens if I put too much in?

Over-contributing to a TFSA, RRSP or FHSA costs 1% a month on the excess until you take it out. The RRSP allows a $2,000 buffer before the penalty starts.

Where to invest: TFSA, RRSP, FHSA or non-registered?

Q: Is an RESP worth it?

Usually, if you’re saving for a child’s education. The government adds a 20% grant on the first $2,500 you put in each year, up to $500 a year and $7,200 per child in total.

Which account first? Fill them in this order, moving on when each is done.

1 Your employer’s RRSP match If there is one: an instant return.
2 FHSA If you might buy a first home: tax-deductible and tax-free.
3 TFSA or RRSP RRSP if your tax rate is higher now than in retirement.
4 Non-registered account Once the others are full.

The accounts

Account	Tax break	2026 limit	Getting the money out
FHSA	Deduction going in, tax-free out for a first home	$8,000 a year, $40,000 in all	Tax-free for a qualifying first home
TFSA	Tax-free growth and withdrawals	$7,000, plus unused room from earlier years	Any time; the room comes back the next year
RRSP	Deduction going in, taxed coming out	18% of last year’s earned income, up to $33,810	Any time, but taxed. Up to $60,000 for a first home under the Home Buyers’ Plan
Non-registered	None	No limit	Any time

These are accounts, not investments. Inside any of them you can hold savings, GICs, ETFs, mutual funds, bonds or shares, at a bank, a discount brokerage or a robo-adviser. A “TFSA” paying 1% in savings and a TFSA holding a low-cost index ETF are very different things.

Which order

Your employer’s RRSP or pension match, if there is one. It’s an instant return on your money.
An FHSA, if you might buy your first home. See FHSA explained.
A TFSA or an RRSP: an RRSP usually wins if your tax rate now is higher than it will be in retirement, and a TFSA if it’s lower. See RRSP vs TFSA, or compare them for your income with the RRSP vs TFSA calculator.
A non-registered account once the others are full.

Pay off high-interest debt and build an emergency fund first.

How the limits work

TFSA: room builds up every year from the year you turn 18 (or 2009, when TFSAs began) while you live in Canada, whether you open an account or not. If you’ve been eligible since 2009 and never put anything in, you have $109,000 of room in 2026. Money you take out is added back on January 1 of the next year. The TFSA calculator works out yours.
RRSP: your room is on your notice of assessment and in CRA My Account. A workplace pension plan reduces it. Contributions in the first 60 days of a year can be deducted for the year before.
FHSA: room only starts building once you open an account, so open one early if there’s any chance you’ll buy.

Going over any of the limits costs 1% a month on the excess.

Saving for a child

An RESP (registered education savings plan) isn’t for you, but it’s worth knowing. The government adds a 20% grant on the first $2,500 you put in each year for a child: up to $500 a year and $7,200 in total. The grants and growth are taxed as the student’s income when they’re taken out for school, usually at a low rate. See the RESP calculator.

Tax outside registered accounts

In a non-registered account, you pay tax every year on what your investments earn:

Interest, from savings or GICs, is taxed in full, like your salary.
Canadian dividends are grossed up and then get the dividend tax credit, so eligible dividends are taxed at a lower rate than salary.
Capital gains are taxed only when you sell, and only half the gain is added to your income. See capital gains tax explained.

So if you hold investments both inside and outside registered accounts, it usually makes sense to keep the ones that pay interest inside. The RRSP calculator shows what your contributions could grow to.