Is an RRSP or a TFSA better?

Compare your marginal tax rate today with your rate when you withdraw. If today's rate is higher, the RRSP wins by that difference. You deduct at a high rate and pay tax at a low one. If today's rate is lower, the TFSA wins. If they are equal, both leave you with the same money, so choose the TFSA for flexibility.

What is an FHSA and who can open one?

A First Home Savings Account gives you the RRSP's deduction going in and the TFSA's tax-free withdrawal coming out, as long as the money buys a qualifying first home. You can open one if you are a Canadian resident aged 18 to 71 and have not lived in a home you or your spouse owned this year or in the previous four. You can put in $8,000 a year, up to $40,000.

Can I use both an FHSA and the RRSP Home Buyers' Plan?

Yes. Since 2023 you can withdraw from an FHSA and also borrow from your RRSP under the Home Buyers' Plan for the same home. The HBP limit is $60,000 per person, repaid over 15 years. FHSA withdrawals are never repaid.

What happens to my FHSA if I don't buy a home?

You can move the whole balance to your RRSP or RRIF tax-free, without using any RRSP room. So the downside is small. The account must close by the end of the 15th year after opening, or the year you turn 71, whichever comes first.

Should I reinvest my RRSP refund?

Yes, or the comparison is not fair. A $6,000 RRSP contribution at a 30% marginal rate really costs $4,200 after the refund. To match $6,000 in a TFSA, you either contribute $8,571 to the RRSP or put the refund back in. If you spend it, the TFSA usually wins even when your retirement rate is lower. The 'refund spent' line shows how much worse you do.

What tax rate will I pay in retirement?

Nobody knows for sure, so the tool lets you set the income you expect in the year you withdraw. Most people withdraw at a lower rate than they earned at, but not always. A large RRSP, a good pension, CPP and OAS together can push retirement income into a higher bracket, and RRIF withdrawals can trigger the OAS clawback. TFSA withdrawals never count as income.

Does the expected investment return change the answer?

No. The return changes the dollar amounts but not the ranking, because the same growth applies inside every account. Only the two tax rates decide which account wins per dollar. The one exception is the FHSA's lifetime cap.

What if my employer matches RRSP contributions?

Take the match first, always. An immediate 50% or 100% match beats any difference between accounts. Then use this tool for whatever you save beyond it.

What order should I fill the accounts in?

Employer match first. Then the FHSA if you might buy a first home within 15 years, because it is deductible like an RRSP and tax-free on the way out like a TFSA, and rolls into your RRSP without using room if you never buy. Then whichever of RRSP or TFSA your tax rates favour, then the other. Then a non-registered account once the room is used up.

RRSP vs TFSA vs FHSA: Which Should You Use?

Find out which account your next dollar should go into, and in what order. The answer depends on your tax rate today versus the rate you expect in retirement, whether you reinvest the refund, and your room. The calculator shows the retirement tax rate at which the RRSP and TFSA tie.

Put your next dollar inFHSAEach after-tax dollar you save becomes $1.15 in an RRSP for every $1.00 in a TFSA, and $1.42 in an FHSA for a first home. The RRSP wins by 15.1% because your tax rate is 29.65% today and 19.05% in retirement, assuming you invest the refund.

What you keep after 25 years, after tax

This year's $6,000, in order	Put in	Room
FHSA	$8,000	$8,000
RRSP	$529	$16,200
Refund next spring (put it back in)	$2,529

The one number that decides it. The RRSP beats the TFSA as long as your tax rate when you withdraw is below 29.65%, your rate today. Above that, the TFSA wins. At that rate they tie.

After 25 years	Cost after tax	You keep
FHSA, tax-free for a home in 5 years ($40,000 in)	$28,140	$46,415
FHSA if you never buy (rolls into your RRSP)		$99,693
RRSP, refund reinvested ($213,220 in)	$150,000	$345,986
TFSA	$150,000	$300,681
RRSP if you spent the refund instead	$150,000	$243,401

Show the math

Your marginal rate today on $90,000 in Ontario is 29.65%. On $50,000 of retirement income it is 19.05% (2026 brackets, or your overrides). TFSA: $6,000.00 a year at 5% grows to $300,680.72 and comes out tax-free. RRSP: the same after-tax cost buys $8,528.78 before tax ($6,000.00 ÷ (1 − 29.65%)). It grows to $427,406.62 and is taxed at 19.05% on the way out. Per dollar, RRSP = TFSA × (1 − retirement rate) ÷ (1 − rate now). FHSA: deductible going in and tax-free coming out for a qualifying first home, $8,000 a year up to $40,000. If you buy no home within 15 years it moves to your RRSP tax-free without using room. That is the "never buy" line. The fill order caps each account at its room (defaults are this year's limits) and stretches deductible contributions by the invested refund. Not modelled: OAS and GIS clawbacks on RRIF income (they favour the TFSA at lower retirement incomes), employer matches (take those first), and Home Buyers' Plan withdrawals.

How this calculator works

All three accounts shelter investment growth from tax. The difference is when you pay tax on the money itself.

RRSP: you deduct contributions now. Every dollar you withdraw later is taxed as income.
TFSA: contributions come from after-tax money. Withdrawals are tax-free.
FHSA: contributions are deducted like an RRSP, and withdrawals are tax-free like a TFSA, as long as the money buys a qualifying first home.

The calculator takes the after-tax amount you can save each year and works out what each account turns it into. For the RRSP it grosses the contribution up by your marginal rate, because the refund lets the same after-tax cost buy a bigger contribution. Both marginal rates come from the same 2026 tax engine as the take-home pay calculator, so Ontario’s surtax, Quebec’s abatement and each province’s credits are included.

The result is a ranking per dollar, which is the fair way to compare accounts with different limits. The rule behind it is RRSP value = TFSA value × (1 − retirement rate) ÷ (1 − current rate). When the two rates are equal the accounts tie. The FHSA multiplies by 1 ÷ (1 − current rate) with no tax on the way out, so it beats both whenever you qualify.

Worked example: $90,000 in Ontario, saving $6,000 a year for 25 years at 5%

Line	Amount
Marginal tax rate today (Ontario, $90,000 employment income)	29.6%
Marginal rate when withdrawing ($50,000 of retirement income)	19.1%
TFSA: $6,000 a year for 25 years	$300,680.72
RRSP contribution with the refund reinvested: $6,000 ÷ (1 − 29.6%)	$8,528.78 a year
RRSP value before tax	$427,406.62
RRSP after tax at 19.1%	$345,985.66
RRSP if the refund is spent instead	$243,401.04
FHSA: $8,000.00 a year for 5 years, then growing untouched	$123,153.62 from only $40,000 paid in

Per after-tax dollar saved, the FHSA returns 71.23, the RRSP 57.66 and the TFSA 50.11. So for a first-home buyer at this income the order is FHSA, then RRSP, then TFSA.

Assumptions and limits

Contributions are made at the start of each year and returns are constant. Real returns vary. The ranking does not.
The retirement marginal rate is worked out on the income you enter, treated as pension-type income in the same province, with no CPP, EI or employment credits.
Withdrawals happen in one tax year at one marginal rate. Spreading RRSP withdrawals over many low-income years makes the RRSP look better than shown. A lump sum in a high-income year makes it worse.
The OAS clawback, GIS and provincial income-tested benefits are not modelled. They count RRSP and RRIF withdrawals as income but ignore TFSA withdrawals, so for lower-income retirees the TFSA often wins even when the tax rates alone say RRSP.
Contribution room is checked against the 2026 limits and flagged, not enforced, because unused room from earlier years is common.

How to open the accounts

All three are opened at a bank, credit union or brokerage. Open the FHSA as soon as you can, even with $0 in it. Room only starts building once the account exists.

FHSA: you must be 18 to 71, a resident, and not have lived in a home you or your spouse owned this year or in the four before. Open it, then contribute up to $8,000 a year, $40,000 lifetime.Opening an FHSA ↗
RRSP: your room is on last year’s Notice of Assessment or in CRA My Account. Contributions in the first 60 days of the year can be deducted on the previous year’s return.CRA My Account ↗
TFSA: open one and check the room the tool calculated against CRA My Account.Opening a TFSA ↗
Buying a first home: you can use both the FHSA and the RRSP Home Buyers’ Plan ($60,000 withdrawal, repaid over 15 years) on the same purchase.Home Buyers’ Plan ↗

Common questions

Frequently asked questions

Is an RRSP or a TFSA better?: Compare your marginal tax rate today with your rate when you withdraw. If today's rate is higher, the RRSP wins by that difference. You deduct at a high rate and pay tax at a low one. If today's rate is lower, the TFSA wins. If they are equal, both leave you with the same money, so choose the TFSA for flexibility.
What is an FHSA and who can open one?: A First Home Savings Account gives you the RRSP's deduction going in and the TFSA's tax-free withdrawal coming out, as long as the money buys a qualifying first home. You can open one if you are a Canadian resident aged 18 to 71 and have not lived in a home you or your spouse owned this year or in the previous four. You can put in $8,000 a year, up to $40,000.
Can I use both an FHSA and the RRSP Home Buyers' Plan?: Yes. Since 2023 you can withdraw from an FHSA and also borrow from your RRSP under the Home Buyers' Plan for the same home. The HBP limit is $60,000 per person, repaid over 15 years. FHSA withdrawals are never repaid.
What happens to my FHSA if I don't buy a home?: You can move the whole balance to your RRSP or RRIF tax-free, without using any RRSP room. So the downside is small. The account must close by the end of the 15th year after opening, or the year you turn 71, whichever comes first.
Should I reinvest my RRSP refund?: Yes, or the comparison is not fair. A $6,000 RRSP contribution at a 30% marginal rate really costs $4,200 after the refund. To match $6,000 in a TFSA, you either contribute $8,571 to the RRSP or put the refund back in. If you spend it, the TFSA usually wins even when your retirement rate is lower. The 'refund spent' line shows how much worse you do.
What tax rate will I pay in retirement?: Nobody knows for sure, so the tool lets you set the income you expect in the year you withdraw. Most people withdraw at a lower rate than they earned at, but not always. A large RRSP, a good pension, CPP and OAS together can push retirement income into a higher bracket, and RRIF withdrawals can trigger the OAS clawback. TFSA withdrawals never count as income.
Does the expected investment return change the answer?: No. The return changes the dollar amounts but not the ranking, because the same growth applies inside every account. Only the two tax rates decide which account wins per dollar. The one exception is the FHSA's lifetime cap.
What if my employer matches RRSP contributions?: Take the match first, always. An immediate 50% or 100% match beats any difference between accounts. Then use this tool for whatever you save beyond it.
What order should I fill the accounts in?: Employer match first. Then the FHSA if you might buy a first home within 15 years, because it is deductible like an RRSP and tax-free on the way out like a TFSA, and rolls into your RRSP without using room if you never buy. Then whichever of RRSP or TFSA your tax rates favour, then the other. Then a non-registered account once the room is used up.

Guides for this calculator

Sources

Every figure on this page comes from one of these primary sources. Data last verified September 7, 2026.

Put this calculator on your own website

Free for brokers, accountants, advisors and bloggers. Paste this where you want the calculator. It sizes itself and credits GlassLayer with a link. The embed page has the terms and every calculator.

<iframe src="https://glasslayer.ca/embed/rrsp-vs-tfsa-vs-fhsa" title="RRSP vs TFSA vs FHSA: Which Should You Use?" style="width:100%;border:0;min-height:900px" loading="lazy"></iframe>
<script>addEventListener('message',e=>{if(e.data&&e.data.type==='glasslayer-embed-height'){document.querySelectorAll('iframe[src*="/embed/"]').forEach(f=>{if(f.contentWindow===e.source)f.style.height=e.data.height+'px'})}})</script>

Data verified for tax year 2026: September 7, 2026 Updated September 7, 2026 By Nishant Malik, founder of GlassLayer