Investment Management
TFSA, RRSP, FHSA and RESP — and the order to use them
Canada gives you several tax-advantaged accounts. Which one you fill first depends on your income today, your income later and what the money is for.
The accounts
What each one is for
TFSA
Growth and withdrawals are tax-free, and withdrawn room comes back the following calendar year. The most flexible account available.
- No tax on withdrawal
- Room restored next year
- Any goal, any timeline
RRSP
A deduction now, tax on withdrawal later. Most effective when your income today is higher than it will be in retirement.
- Deduction against income
- Tax-deferred growth
- Home Buyers' Plan
FHSA
For a first home: deductible going in and tax-free coming out, which no other account offers at the same time.
- Annual and lifetime limits
- Deductible contributions
- Tax-free qualifying withdrawal
RESP
Education savings with government grant money attached — the grant is usually the single best return available.
- Government grants
- Tax-deferred growth
- Taxed in the student's hands
Which account, in what order
There is no universal order, but there are strong patterns. Grant money is rarely left on the table, so RESP contributions that attract a grant usually come early. Employer matching, where it exists, is treated the same way.
After that it becomes an income question. In higher-income years, the RRSP deduction is worth more; in lower-income years, TFSA room usually does more work. For a first home, the FHSA is generally used ahead of an RRSP withdrawal because nothing has to be repaid.
We map your room across every account, decide the sequence with you, and revisit it annually as income changes.
Common questions
How do I know my contribution room?+
Your CRA account shows current room for each registered account. We review it with you before contributing so nothing triggers an over-contribution penalty.
Can I hold the same investments in each?+
Largely yes — the difference is tax treatment, not what you can own. That is exactly why account location matters.
What about non-registered accounts?+
Once registered room is used, non-registered investing continues the plan, with attention to how interest, dividends and capital gains are each taxed.
Get your accounts in the right order
We will map your available room and show you the sequence that fits your income.
Investco Financial is licensed in British Columbia and Alberta for insurance and related financial services. Information on this page is general in nature and is not individual advice. Coverage, eligibility and tax outcomes depend on your own circumstances and the terms of the contracts issued.