Here’s a fast refresher on RRSPs and TFSAs, including their contribution limits:
| Comparison points | RRP | TFSA |
|---|---|---|
| Purpose | Retirement planning | Any savings goal, whether short-term or long-term |
| Age requirement | Any age as much as 71 | 18 and older |
| Required earned income | Yes, you’ve got to earn an income as a way to have scope for contributions | NO |
| Tax deduction for contributions | Yes, and tax deductions could be carried forward for a future tax return | NO |
| Growth tax (interest, capital gains, dividends) | Tax-deferred until the cash is withdrawn (during retirement, when income is more likely to be lower) | Tax free |
| Post room | Whichever is less: 18% of your previous 12 months’s earned income or the federal government’s annual RRSP contribution limit (for tax 12 months 2024 it’s $31,560 and for 2025 it’s $32,490), plus any unused contribution room from previous years | Cumulative from age 18, with different amounts announced annually (for 2025, the limit is $7,000); If you were born in 2009 or before (the 12 months the TFSA was created), your total limit as of January 1, 2025 is $102,000 |
| What it could hold | Cash and qualifying investments: stocks, bonds, mutual funds, exchange-traded funds, guaranteed investment certificates (GICs), and more | Cash and qualifying investments: stocks, bonds, mutual funds, exchange-traded funds, guaranteed investment certificates (GICs), and more |
What in case you maxed out your RRSP and TFSA?
If you’ve got made regular contributions to your RRSP and TFSA over time, you will have run out of room – especially for the TFSA with its modest annual limits.
If you are searching for an alternate, consider a high-yield savings account (HISA). HISAs are only as easy to make use of as regular bank accounts: you possibly can access your savings, transfer money, and arrange automatic deposits at any time. They don’t tie up your money for years and even months like some savings products would (we’re taking a look at you, GICs and bonds). And what may be very essential for committed savers: HISAs haven’t any contribution limits.
The high interest savings account from Simplii Financial is currently offering a generous welcome offer for brand spanking new customers: 3.9% interest on qualified deposits as much as $1 million for the primary five months. (Offer ends March 31, 2025 – so don’t wait!)
sponsored
Simplii Financial High Yield Savings Account
Simpliis HISA has no transaction fees or monthly fees and no minimum balance required.
Welcome offer: Earn 3.90% interest on eligible deposits for the primary 153 days. (Restrictions apply. Offer ends March 31, 2025.)
Interest rate: 0.30% to 2.00% (depending in your balance)
Simplii’s HISA is freed from things you do not need—including monthly fees, transaction fees, and minimum balances—so there aren’t any additional costs that might eat into your savings.
If you are not yet out of RRSP and TFSA contribution room, Simplii also offers competitive rates of interest on these accounts for purchasers who open an account before March 31, 2025. Visit Simplii.com for details. Customers must first join Simplii before opening a TFSA or RRSP account.
Don’t miss out on the bonus interest
You could leave your excess money in your regular savings account, but have you ever checked the rate of interest recently? You’ll be surprised at what you miss.
A HISA can allow you to further increase your savings when other options have been exhausted or are too restrictive on your financial goals. Whether you are saving for a family vacation, home renovations, or retirement (or perhaps all three), bonus interest can allow you to reach your goal faster—especially while you consider the ability of compound interest.
