It’s that time of year. The two savings vehicles at the forefront of many discussions right now are the Tax Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). Though your individual circumstance plays a big role in deciding which one is right for you, the following guide will help you navigate the differences and give you a basic understanding of the options.
|At what age can I start contributing?||You must be 18 and a Canadian citizen.||When you have declared income and filed a tax return.|
|How much can I put in per year?||$6,000 (as of 2020)||18% of previous year’s income (as of 2020)|
|If I put in less than the limit one year, can I make up for it the next year?||Yes||Yes|
|Can I make tax-free withdrawals?||Yes, anytime.||No. Subject to withdrawal taxes.|
|Can I top up again after withdrawals?||Yes||No|
|Are these savings tax deductible?||Deposits are not but earnings and withdrawals are tax-free.||Yes, and tax-sheltered until withdrawn.|
|Is the interest I earn tax-sheltered?||Yes||Yes, until withdrawn.|
Opening a TFSA and RRSP just got easier.
Interior Savings Members can now open RRSP and TFSA contracts remotely with an electronic signature. Remote electronic signature allows members to sign their documents on any internet-enabled device, such as their smartphone, computer, or tablet, at any time. It doesn’t get any easier than that!
Talk to our Financial Experts.
We’re here to help. Talk to one of our financial experts about your options and how to maximize the value of your investments. You’ll find the small effort it takes to get trusted advice and make regular investments is worth the reward.