Both accounts shelter growth from tax completely. The only real question is whether your tax rate today is higher or lower than your tax rate when you withdraw.
The rule in one line
If your marginal rate today is higher than it will be at withdrawal, use the RRSP. If it is lower, use the TFSA. If they are the same, the two are mathematically identical.
That last point surprises people. Contribute $1,000 pre-tax to an RRSP at a 30% rate, double it, withdraw $2,000 and pay 30% — you keep $1,400. Or pay the 30% first, put $700 in a TFSA, double it, and withdraw $1,400 tax-free. Identical. The difference only appears when the rates differ.
| Your situation | Lean toward | Why |
|---|---|---|
| Income under $55,000 | TFSA | Your rate is low now and likely to rise |
| Income over $115,000 | RRSP | The deduction is worth 40%+ today |
| Employer matches RRSP | RRSP | The match beats every other consideration |
| Saving for a first home | FHSA first | Deductible in and tax-free out |
| Expecting a pension | TFSA | Withdrawals will not touch income-tested benefits |
| Income-tested benefits | RRSP | The deduction raises CCB and GIS |
Three things that break the simple rule
- Employer matching. A 50% match is an immediate 50% return. Take it before anything else, whatever your rate.
- Income-tested benefits. An RRSP deduction lowers the income used for the Canada Child Benefit and the GIS, so its true value can exceed your marginal tax rate.
- The OAS clawback. Large RRSP balances become mandatory RRIF withdrawals at 71, which count toward the $95,300 clawback threshold. TFSA withdrawals never do.
The 2026 numbers
One asymmetry worth remembering: TFSA withdrawals restore your contribution room on January 1 of the following year. RRSP withdrawals destroy the room permanently, and are taxed as income on the way out.
Run it on your own numbersAccount optimizerWhere your next dollar belongs: FHSA, RRSP, RESP, TFSA or the debt.Written against published 2026 federal and provincial figures. General information, not financial, tax, or legal advice — see the methodology and disclaimer.