RRSP, TFSA, FHSA, RESP: The Alphabet Soup of Savings Accounts
If you’ve ever sat down to sort out your savings and felt overwhelmed by all the acronyms, you’re not alone. RRSP, TFSA, FHSA, RESP: it can start to feel like you need a financial decoder just to figure out where your money should go.
As your trusted mortgage professional, I’m here to make sense of these accounts and show you how each one can help you get into a home and stay there comfortably.
Let’s break it down.
RRSP – Registered Retirement Savings Plan
What it is:
An RRSP is a retirement savings account that lets you defer taxes. When you contribute, you lower your taxable income for the year. You only pay tax when you withdraw the money, ideally in retirement when your income (and tax rate) is lower.
How it helps with home ownership:
The Home Buyers’ Plan lets first-time homebuyers withdraw up to $60,000 from their RRSP tax-free to put toward a down payment. You’ll need to repay that amount over 15 years, but it’s a great way to boost your buying power.
TFSA – Tax-Free Savings Account
What it is:
This flexible account lets your money grow tax-free. Whether your investments go up or you earn interest, you won’t pay a cent in tax even when you withdraw the money.
How it helps with home ownership:
TFSAs are perfect for saving for a down payment, emergency fund, or renovation. Unlike the RRSP, there’s no repayment if you withdraw funds. That makes it a strong option if you want freedom and flexibility.
FHSA – First Home Savings Account
What it is:
The newest tool in the savings toolbox. This account combines the tax benefits of both RRSPs and TFSAs. You get a tax deduction for contributions (like an RRSP) and tax-free growth and withdrawals (like a TFSA) — as long as it’s used for your first home.
How it helps with home ownership:
You can contribute up to $8,000 per year, to a maximum of $40,000. If you’re a first-time buyer, this account is a no-brainer. Use it alongside the RRSP Home Buyers’ Plan for an even bigger boost.
RESP – Registered Education Savings Plan
What it is:
This account is designed to save for your child’s education. Contributions aren’t tax-deductible, but the government chips in up to $7,200 through the Canada Education Savings Grant (CESG).
How it helps with home ownership:
Okay, the RESP won’t help you buy a home. But once you own a home and have a family, this account becomes key to long-term financial stability. With post-secondary costs covered, you won’t need to borrow or dip into your home equity down the road.
Putting It All Together: From Keys to Comfort
Here’s how these accounts can work together to help you achieve homeownership and keep your finances healthy:
Use your FHSA. Max it out for the best tax-free growth and withdrawals.
Tap into your RRSP through the Home Buyers’ Plan to add more to your down payment.
Build your TFSA for added flexibility — it can help with closing costs, moving expenses, or a rainy-day fund.
Set up an RESP if you have children. Protecting their education savings helps protect your financial future too.
Final Thoughts
You don’t need to be an expert to make the most of these accounts. But having a strategy — and a guide — makes all the difference.
Whether you're saving for your first home, planning an upgrade, or looking to stay put and build equity, I'm here to help you map it out step-by-step.
And if you’re not sure where to begin with RRSPs, TFSAs, FHSAs, or RESPs, I work with a network of trusted financial advisors and would be happy to connect you with someone who can help you get started with confidence.
Have questions about how these tools can support your mortgage and homeownership goals? Let’s talk.