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RRSP or TFSA...or both?

By ATB Wealth 8 March 2019 1 min read

RRSPs and TFSAs are similar because they both provide incentives for Canadians to save and invest, but their differences will likely lead you to one or the other.


The big difference

The biggest difference between an RRSP and TFSA is when you pay tax. RRSP contributions are called “before tax” money because those investments are tax deductible. This means that you’ll have to pay tax when you withdraw it—not a good thing if your income tax rate is high at that time.

In comparison, TFSA contributions are called “after tax” money because those contributions are not tax deductible. As such, you do not pay tax on withdrawals.


Two simple rules




The pros and cons of flexibility

Although you should definitely consider taxes when making your decision, don’t forget about other factors—like your saving and spending habits.



The types of accounts in which you hold your investments can be just as important as the investments themselves. Get expert advice at your local branch.​

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