Here’s a quick review of RRSPs and TFSAs, including their contribution limits:
| point of comparison | Registered Retirement Savings Plan | TFSA |
|---|---|---|
| Purpose | retirement savings | Any short-term or long-term savings goals |
| Age requirement | Any age under 71 | 18 years and over |
| income requirements | Yes, you must earn income to create contribution room | No |
| Donations are tax deductible | Yes, tax deductions can be carried forward to future tax returns | No |
| Growth tax (interest, capital gains, dividends) | Defer taxes until funds are withdrawn (income may be lower during retirement) | duty free |
| Contribution room | Whichever is lower: 18% of your previous year’s income or the government’s annual RRSP contribution limit ($31,560 for tax year 2024, $32,490 for 2025), plus any unused contribution room from previous years | Accumulation begins at age 18, with a different amount declared each year (in 2025, the limit is $7,000); if you were born in 2009 (the year the TFSA started) or before, your cumulative limit is $102,000 as of January 1, 2025 |
| what can it hold | Cash and qualified investments: stocks, bonds, mutual funds, exchange-traded funds, guaranteed investment certificates (GICs), and more | Cash and qualified investments: stocks, bonds, mutual funds, exchange-traded funds, guaranteed investment certificates (GICs), and more |
What if your RRSP and TFSA are maxed out?
If you’ve been making steady contributions to RRSPs and TFSAs over time, you may have run out of room, especially since TFSAs don’t have large annual limits.
If you’re looking for an alternative, consider a high-interest savings account (HISA). A HISA is as easy to use as a regular bank account: you can withdraw your savings, transfer funds, and set up automatic deposits at any time. They don’t lock up your money for years or even months like some savings products do (we’re looking at you, GICs and bonds). And, very importantly for dedicated savers, HISAs have no contribution limits.
Simplii Financial’s high-interest savings account currently offers a generous welcome offer to new customers: 3.9% interest on qualifying deposits up to $1 million in the first 5 months. (Offer ends March 31, 2025 – so don’t wait!)
Sponsored
Simplii Financial High Interest Savings Account
Simplii’s HISA has no transaction fees or monthly fees, and no minimum balance requirements.
Welcome offer: Qualifying deposits earn 3.90% interest for the first 153 days. (Restrictions apply. Offer ends March 31, 2025.)
interest rate: 0.30% to 2.00% (depending on your balance)
Simplii’s HISA doesn’t include the stuff you don’t want, including monthly fees, transaction fees, and minimum balances, so there aren’t any extra fees to take away from your savings.
If you haven’t exhausted your RRSP and TFSA contribution room, Simplii also offers competitive interest rates to customers who open accounts before March 31, 2025. Clients must join Simplii before opening a TFSA or RRSP account.
Don’t let bonus interest slip away
You could keep the extra cash in your regular savings account, but have you checked its interest rate lately? You might be surprised at what you’re missing.
A HISA can help you continue to grow your savings when other options have been exhausted or are too restrictive for your financial goals. Whether you’re saving for a family vacation, home improvements, or retirement expenses (or maybe all three), bonus interest can get you there faster, especially when you factor in the power of compound interest.
