RRSP vs TFSA: Which Should You Fill First?

The one-line difference

RRSP: you get a tax deduction now, and pay tax when you take the money out. TFSA: no deduction now, and nothing to pay when you take it out.

Inside either account, growth isn’t taxed. So the question isn’t which one “saves tax.” They both do. It’s whether you’d rather take the tax break today or later.

The 2026 numbers

$7,000: New TFSA room this year. Up to $109,000 in total if you’ve been eligible since 2009 and never contributed.
$33,810: The 2026 RRSP maximum: 18% of last year’s earned income, up to this limit, plus unused room.
$8,000: FHSA room a year, $40,000 lifetime, for first-time home buyers.

The question that decides it

Compare your tax rate now with the rate you expect when you take the money out, usually in retirement.

Higher now than later? The RRSP usually wins. You deduct at a high rate and withdraw at a lower one.
Lower now than later? The TFSA usually wins. A deduction isn’t worth much when your rate is low.
About the same? They come out close. The TFSA’s flexibility often tips it.

Four situations where the answer is usually clear

1. Your employer matches contributions

Take the match first, before either account on your own. A 3% match on a $60,000 salary is $1,800 a year that you only get if you enroll. There’s no better return on offer.

2. You’re buying your first home

Look at the FHSA first. It combines the best of both: deductible going in, like an RRSP, and qualifying withdrawals for your first home aren’t taxed, like a TFSA.

3. Your income is modest, or goes up and down

The TFSA is often the better home in leaner years. You can also contribute to an RRSP now and save the deduction for a later year when your income, and your tax rate, is higher.

4. You earn well and expect less in retirement

The RRSP usually comes first. At a tax rate of about 30%, a $5,000 contribution can bring back roughly $1,500. Put that refund into your TFSA and you’re using both accounts well.

Things people miss

TFSA withdrawals come back. Whatever you take out is added back to your room on January 1 of the next year.
RRSP withdrawals don’t. Take money out early and it’s taxed as income, and that room is gone, with a few exceptions like the Home Buyers’ Plan.
OAS can be affected. RRSP and RRIF withdrawals count as income in retirement, which can reduce OAS at higher incomes. TFSA withdrawals don’t count.
Over-contributing is expensive. Going over your limit generally costs 1% a month on the excess until it’s fixed.

The honest answer

Most people end up using both. The order you fill them in, and what’s held inside them, matters more than picking a winner.

General information based on 2026 federal rules, not personal tax advice. Your exact RRSP and TFSA room is in your CRA My Account.

RRSP vs TFSA: which should you fill first?