Canadians have several effective ways to save and grow their money, including registered accounts that deliver important tax advantages. If you’re building a retirement nest egg, you likely use a registered retirement savings plan (RRSP) and a tax-free savings account (TFSA).
Below is a concise refresher on how RRSPs and TFSAs work and what their contribution rules are:
| Comparison points | RRSP | TFSA |
|---|---|---|
| Purpose | Primarily for retirement savings | For any savings goal, short- or long-term |
| Age requirement | Anyone with earned income up to age 71 | Available from age 18 |
| Earned income requirement | Yes — contribution room is based on earned income | No — contribution room does not require earned income |
| Tax deduction for contributions | Yes — contributions reduce taxable income and unused deductions can be carried forward | No — contributions are not tax-deductible |
| Tax on growth (interest, capital gains, dividends) | Tax-deferred until withdrawal (typically in retirement) | Tax-free while funds remain in the account |
| Contribution room | 18% of the previous year’s earned income or the annual RRSP limit (whichever is lower), plus unused room carried forward (2024 limit: $31,560; 2025 limit: $32,490) | Accumulates from age 18 with annual limits (2025 annual limit: $7,000). If you were already eligible when the TFSA launched in 2009, your cumulative limit as of Jan. 1, 2025 is $102,000 |
| What it can hold | Cash and qualifying investments: stocks, bonds, mutual funds, ETFs, GICs and more | Cash and qualifying investments: stocks, bonds, mutual funds, ETFs, GICs and more |
What if you’ve maxed out your RRSP and TFSA?
It’s common for disciplined savers to exhaust RRSP and TFSA contribution room — especially for TFSAs, which have relatively modest annual limits. If you need a flexible place to keep extra savings, consider a high-interest savings account (HISA).
HISAs work much like regular savings accounts but with higher interest rates. They let you keep funds accessible: you can transfer cash, make withdrawals, and set up automatic deposits without locking your money into a fixed term. Unlike registered accounts, HISAs have no contribution limits, so they’re a practical option when your registered room is full or when your goal requires liquidity that GICs or bonds don’t provide.
Simplii Financial High Interest Savings Account
Simplii Financial offers a high-interest savings account with no monthly fees and no minimum balance requirement. For new customers, banks often run limited-time welcome rates on eligible deposits — check the financial institution’s site for the latest offer, eligibility and the exact term length.
Standard interest range: Varies by balance and current market conditions; consult Simplii Financial or your bank for up-to-date rates and terms.
Simplii’s HISA removes many of the common barriers that erode savings: there are no monthly account fees, no maintenance charges and no minimum balance. That means the interest you earn stays in your account and compounds over time.
If you still have available RRSP or TFSA room, check whether your financial institution offers competitive rates on those registered accounts as well. Many banks run targeted promotions for clients who open registered accounts through specific application windows; you’ll need to join the provider and meet any eligibility conditions before opening a TFSA or RRSP there.
Don’t let bonus interest pass you by
If extra cash sits in a basic savings account, you could be missing out on meaningful interest. Comparing rates and moving funds into a higher-yielding savings product can accelerate your progress toward goals like a vacation, home renovations, or retirement top-ups.
A HISA is particularly useful when you want both decent returns and immediate access to funds. Even modest increases in rate can compound over time and make a noticeable difference in the size of your savings. Before switching, read the fine print: verify whether promotional rates apply only for a fixed period and what the ongoing rate will be afterward.
If a limited-time welcome rate is available, treat it as a temporary boost to your savings plan but also make sure the account’s standard terms meet your longer-term needs.
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This is a paid post that is informative and may highlight a client’s product or service. These pieces are produced and edited by MoneySense with contributions from contracted writers.
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