Compare an RRSP with the Fonds with the TFSA

There are several differences between an RRSP with the Fonds and the TSFA. To make an informed decision, explore some of the specific features of these two savings vehicles.

Explore the differences

What is the allowed annual contribution limit?

RRSP with the Fonds*

TFSA

$5,000 is the maximum amount to benefit from the additional tax savings of 30% when you invest in an RRSP with the Fonds. However, your global limit is determined by the "Available contribution room" amount found on the RRSP/PRPP Deduction Limit Statement of your latest notice of assessment or notice of reassessment.

$5,500 
($5,000 from 2009 to 2012, $5,500 from 2013 to 2014 and $10,000 for 2015)

Can the unused contribution room be carried forward?

RRSP with the Fonds*

TFSA

Yes for RRSP deductions.

No for tax credits. It is therefore important to contribute each year in order not to lose the opportunity to benefit from the labour-sponsored fund credits.

Yes

Is there an age limit for contributing?

RRSP with the Fonds*

TFSA

Until the end of the year in which you turn age 71 for the RRSP.

You are eligible for the tax credits until the year you will reach 64.

No age limit

Are contributions tax-deductible?

RRSP with the Fonds*

TFSA

Yes. In addition, they entitle you to 30% more tax savings.

No

Is interest on savings tax-free or tax-deferred?

RRSP with the Fonds*

TFSA

Tax-deferred (not taxed until withdrawn)

Interest earned is tax-free

What are the tax implications of withdrawals?

RRSP with the Fonds*

TFSA

Withdrawals are added to your taxable income in the same year.

Withdrawals are not taxable as you have already paid taxes on these amounts.

For what reasons may withdrawals be made?

RRSP with the Fonds*

TFSA

Although an RRSP with the Fonds is designed for retirement, the Fonds offers about 20 opportunities to withdraw your savings, including buying a first home or going back to school.

You can withdraw your savings at any time (depending on what you invest in).

Do withdrawals affect contribution room?

RRSP with the Fonds*

TFSA

No

The amount of withdrawals is added to contribution room starting the following calendar year.

Do withdrawals affect government benefits?

RRSP with the Fonds*

TFSA

Since they are considered taxable income, withdrawals could affect eligibility for income-tested government benefits.

Income earned and withdrawals do not affect eligibility of income-tested federal government benefits and credits.

Is there an over-contribution penalty tax?

RRSP with the Fonds*

TFSA

Yes, contributions in excess of your RRSP deduction limit are subject to a penalty tax of 1% per month.

In addition, if your deduction limit is over $5,000, you can still claim the RRSP deduction but cannot get the additional tax savings.

Yes, excess contributions are subject to a penalty tax of 1% per month.

Am I required to convert my accounts or plan at a certain age?

RRSP with the Fonds*

TFSA

Yes. During the year in which you turn age 71, you must convert your RRSP using one of the eligible maturity options, e.g. transfer to a registered retirement income fund (RRIF), purchase an annuity or choose to close your plan.

No

Are account balances protected from creditors in the event of bankruptcy?

RRSP with the Fonds*

TFSA

Yes

No

Can assets be pledged as collateral for a loan?

RRSP with the Fonds*

TFSA

No

Yes

Are accounts and balances included in the family patrimony?

RRSP with the Fonds*

TFSA

Yes

No

Note: This comparison is intended as a general source of information. It is based on information from the Government of Canada As of March 2, 2016 and can be subject to change.

Contact us to learn more about the RRSP with the Fonds. For more information on the TFSA, visit http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/.



* The tax credits granted to the shareholders of the Fonds are 15% at the federal level and 15% at the provincial level. Please read the prospectus before investing. Copies of the prospectus may be obtained on its Website, from a local representative or at the offices of the Fonds de solidarité FTQ. The shares of the Fonds de solidarité FTQ are not guaranteed, their value changes and past performance may not be repeated.

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