The following chart helps explain some of the additional similarities and differences.
TFSA | RRSP | |
|---|---|---|
| Annual contribution limit | Currently set at $7,000 for 2026 regardless of your earned income. | The lesser of $33,810 or 18% of earned income, less pension adjustment for 2026. |
| Maturity date | None | You must convert by the last day of the year in which you turn 71 to a Registered Retirement Income Fund (RRIF) or payout annuity. |
| Tax-deductible contributions | No | Yes, it reduces your taxable income at the time of the contribution. |
| Tax on withdrawals | Contributions and investment income are withdrawn tax-free. | The sum taken out will be added to your annual income for tax purposes. Applicable marginal tax rate applies. |
| Impact on eligibility for government benefits, such as the Canada Child Tax Benefit (CCTB was replaced in 2016 -- it’s now the Canada Child Benefit (CCB), Old Age Security (OAS) or the Guaranteed Income Supplement (GIS) | No | Yes |
| Contribution room restored after withdrawals | Yes, added back at the beginning of the following year. | No |
| Ability to carry forward unused contribution room | Yes | Yes |
| Penalty for exceeding contribution limits | 1% per month | 1% per month if exceeding RRSP limit by more than $2,000 (exceptions apply) |
| Spousal contributions | Gifted amounts from a spouse can be contributed by TFSA account holder; however, the Income Tax Act does prohibit anyone other than the account holder from contributing to your TFSA. | Allowable to a Spousal RRSP, 3-year attribution rule applies. |