A TFSA (Tax-Free Savings Account) allows Canadians to earn investment income tax-free. It's ideal for saving towards both short- and long-term goals with flexibility and no tax on withdrawals.
An RRSP (Registered Retirement Savings Plan) is a tax-deferred savings vehicle designed for retirement. Contributions reduce taxable income, and investment growth is taxed only upon withdrawal.
If you're saving for short- or mid-term goals, like a home or emergency fund, a TFSA may offer more flexibility. For long-term retirement planning and income reduction, an RRSP may be a more strategic choice. Consider your income, goals, and timeline when making the decision.
