Registered Accounts Explained: TFSA, RRSP, FHSA, and RESP

Canada's registered account system is one of the best in the world for building wealth tax-efficiently. But with four different account types, it can be confusing to know which one to use. Here's the plain-language breakdown.

TFSA — The all-rounder

Contribute after-tax dollars, everything grows tax-free, withdraw tax-free anytime. Room comes back after withdrawal. Best for: almost everyone as a first account. 2026 limit: $7,000/year.

RRSP — The tax reducer

Contributions reduce your taxable income today. Growth is tax-deferred. You pay tax when you withdraw in retirement (ideally at a lower rate). Best for: high-income earners who want to reduce their tax bill now. 2026 limit: $33,810 or 18% of income.

FHSA — The home buyer's secret weapon

Contributions are tax-deductible (like RRSP) AND qualifying withdrawals are tax-free (like TFSA). The best of both worlds, but only for first-time home buyers. Best for: anyone who might buy a home in the next 15 years. Limit: $8,000/year, $40,000 lifetime.

RESP — Free money for education

The government matches 20% of your contributions (up to $500/year per child) through the CESG grant. Growth is tax-sheltered. Best for: parents saving for their children's education. Up to $7,200 in free government grants per child.

The priority order

For most Canadians: 1) TFSA first (flexibility + tax-free growth), 2) FHSA if you're a potential home buyer, 3) RRSP if your income is high, 4) RESP if you have kids. If you can afford to contribute to all of them, do it. Each one has unique advantages that stack together.