Advertisement
Sponsored By
EQ Bank
Registered accounts can help you get more out of your money. Here are some benefits many Canadians aren’t aware of, as revealed by an EQ Bank survey.
Amidst volatile financial markets and economic uncertainty caused by the trade war, many Canadians are exploring different strategies to protect their savings. If you’re among them, knowledge about different registered accounts you’re saving in can influence how effectively you use them to secure your future. Offering incentives like deferred tax payments, tax-free growth or tax deductions, registered accounts can help you build wealth faster—and keep it growing.
The benefits aren’t limited to more money, either. Canadians who are saving in registered accounts feel greater financial confidence and emotional stability, according to a recent EQ Bank survey. It found that 71% of Canadians saving in a registered account are proud of their financial goals and their ability to achieve them, compared to just 37% of those without registered accounts.
While most Canadians are familiar with registered accounts such as the tax-free savings account (TFSA), registered retirement savings plan (RRSP) and first home savings account (FHSA), many aren’t familiar with the full spectrum of benefits. EQ Bank’s survey revealed low awareness of several key details about TFSAs, RRSPs and FHSAs. To help you maximize the benefits of registered accounts—and avoid common mistakes—let’s look at 10 of them.
The TFSA was designed to help Canadians save for short- or long-term goals, like a big trip, wedding and even retirement. You won’t receive a tax deduction for contributing, but neither will you pay tax on growth in the account. Here are three key things to know about TFSAs:
Awareness: 36%
When you make a TFSA withdrawal, the withdrawn amount is added back to your contribution room at the start of the next calendar year. Say you withdraw $2,000 in 2025—you’ll get that contribution room back on Jan. 1, 2026. Just don’t re-contribute to it in the same year in which you made the withdrawal, unless you have unused TFSA room—otherwise, that re-contribution will count as an over-contribution.
Awareness: 48%
If you’re 18 or older, you have TFSA contribution room, even if you haven’t opened an account. That room grows each year, as the Canadian government announces new annual limits (for 2025, it’s $7,000). Check your own TFSA limit using MoneySense’s TFSA contribution room calculator, and see annual TFSA limits since 2009.
Awareness: 45%
TFSA contribution room doesn’t depend on how much you earn—all Canadians over age 18 have the same annual and overall TFSA limits, based on age.
Awareness: 32%
This penalty is based on the highest excess amount in each month, and it will continue for as long as the excess stays in your TFSA.
Nearly all Canadians (98%) are aware of RRSPs, and most (84%) know that RRSP contributions are tax-deductible and that withdrawals are taxed as income in the year they’re withdrawn. However, awareness of the following facts was considerably lower.
Awareness: 54%
If you don’t max out your RRSP contribution room in any given year, you don’t lose it—it carries forward (until Dec. 31 the year you turn 71), giving you the opportunity to catch up in the future.
Awareness: 22%
You can borrow from your RRSP for certain purposes, including buying or building a home. As of 2024, the limit for the Home Buyers’ Plan is $60,000 (it was previously $35,000). You must be a first-time buyer, and you must repay your RRSP within 15 years, starting five years after the withdrawal. Learn more about changes to the Home Buyers’ Plan.
Awareness: 26%
If you make a withdrawal from your RRSP before it’s matured (at the end of the calendar year you turn 71), you don’t get that contribution room back. That’s different from TFSAs, where any amount withdrawn is added back to your contribution room the following year. Keep in mind, too, that RRSP withdrawals are treated as taxable income in the year they’re withdrawn, unlike TFSA withdrawals, which are tax-free.
What about RRSP funds borrowed using the Home Buyers’ Plan or the Lifelong Learning Plan? The repayments for these plans don’t affect your RRSP contribution room, and they aren’t tax-deductible.
An FHSA is a tax-advantaged registered plan designed to help you save for your first home. Your contributions are tax-deductible, and you can withdraw the money, tax-free, for any qualifying home purchase. Here are more key details about FHSAs.
Awareness: 17%
Once you’ve opened an FHSA, you can contribute up to $8,000 per year, up to a lifetime contribution limit of $40,000. The account can stay open for up to 15 years, or until Dec. 31 of the year you turn 71, whichever comes first.
Awareness: 26% (annual limit) and 22% ($40,000)
If you contribute and/or transfer more to your FHSA than your annual or lifetime limits, you’ll be charged a 1% tax per month on the highest excess amount that month. Learn more about FHSA over-contributions.
Awareness: 14%
That means your total contribution room for any given year can’t exceed $16,000. Not sure you’re going to buy a home? You may want to open an FHSA anyway, to start building up contribution room this year. You can always transfer any unused FHSA funds for a house to your RRSP.
In times of uncertainty, many Canadians prefer to have cash savings near at hand. That’s especially true when people anticipate needing that money in the near future—for example, to buy a home or fund their retirement in the next five years.
Here are three great options for holding and growing cash savings:
If you have maxed out your registered accounts, or you also want to have immediate access to cash savings, consider these options:
Plus, EQ Bank’s registered accounts, savings accounts and GICs are eligible for Canada Deposit Insurance Corporation (CDIC) protection, up to $100,000 per category, per depositor.
Interest is calculated daily on the total closing balance and paid monthly. For the EQ Bank Card, interest is paid into the linked Personal Account. Rates are per annum and subject to change without notice. For the Personal Account, Joint Account and EQ Bank Card, the current base interest rate is 1.25% (the “Base Rate”). Customers who add and maintain qualifying recurring direct deposits of at least $2000/month to a Personal Account or Joint Account are eligible to earn a bonus interest rate of 4.00% (the Base Rate plus an additional 2.75%) for the eligible accounts (the Personal Account, Joint Account, and the EQ Bank Card balance). Conditions apply. Please review the EQ Bank Bonus Interest Offer Terms and Conditions for details.
Equitable Bank is a member of CDIC. EQ Bank is a trade name of Equitable Bank. Deposits made under EQ Bank and Equitable Bank are aggregately eligible for CDIC protection up to $100,000, per insured category, per depositor.
These findings are from a survey conducted by EQ Bank from Jan. 17 to 20, 2025, among a sample of 1,504 online Canadians who are members of the Angus Reid Forum. The survey was conducted in English and French. For comparison purposes only, a probability sample of this size would carry a margin of error of +/-4.4 percentage points, 19 times out of 20.
This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers and approved by the client.
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
The party’s platform proposals may impact RRIF minimum withdrawals, income tax and more. Here’s how Canadians can plan for...
If you get a letter from the Canada Revenue Agency about your income tax return, here’s what it could...
Find the best GIC rates in Canada. Plus, everything you need to know about how they work.
You can deduct a lot for valid automobile expenses, but you’ll need to keep a detailed record of your...
The data behind the top places to buy real estate in Canada.
