TFSA, RRSP, and FHSA are just three different tax deals the government is practically begging you to take, and the only wrong answer is letting your cash sit in a checking account doing nothing.
The breakdown
Quick public service announcement: these accounts are not investments. They are wrappers. You open the wrapper, then you put investments inside it. The wrapper decides how the CRA treats you. The stuff inside decides how fast it grows. People mix these two ideas up constantly, which is how we end up with an entire generation keeping their "TFSA" in a savings account earning next to nothing. (No judgment. Most of us started there.)
TFSA: pay tax now, never think about it again. You contribute money you've already been taxed on, and from that moment the CRA officially stops caring about you. Growth? Yours. Withdrawals? Yours. All of it tax-free, whenever you want it. Pull money out and you get the room back next year, like a boomerang made of tax policy. For most people early in their careers, this is the default answer, and here's why: your tax bracket is probably the lowest it'll ever be right now, which is actually an advantage. The RRSP deduction isn't worth much when you're not paying much tax yet, and the TFSA's flexibility matters more when you're still figuring things out.
RRSP: the government's "pay me later" plan. Contributions shrink your taxable income today, which means a refund that feels like free money but is really just the CRA returning your own cash with a thank-you note. The catch: you pay tax when you withdraw, ideally in retirement when your income is lower. The math gets better as your salary grows, so early on, the RRSP can wait. One exception worth knowing: the Home Buyers' Plan lets you borrow from your RRSP for a down payment. Key word: borrow. You pay it back over 15 years. It's a loan from yourself, not a gift from the government, no matter what your uncle says at Thanksgiving.
FHSA: the overachiever. Launched in 2023, this one looked at the TFSA and RRSP and said "why not both?" You get the deduction going in and tax-free withdrawals coming out, but only toward your first home. Here's the part most people miss: if you never buy, the whole thing rolls into your RRSP with zero penalty. It's basically a bet with no losing outcome. And here's the part everyone sleeps on: your contribution room only starts accumulating after you open the account. Not automatically at 18. When you open it. Every month you don't have one is room quietly evaporating.
So, the decision order: FHSA first if homeownership is even a distant daydream. TFSA second for flexibility. RRSP third, waiting patiently for the day your salary makes the deduction actually worth something.
The numbers
Three numbers worth memorizing:
TFSA: $7,000 a year. If you were 18 back in 2009 and never contributed, you'd be sitting on $109,000 of room today. In your twenties, yours is smaller, but still: check your CRA My Account, because guessing wrong costs a 1% per month penalty on over-contributions. The CRA does not accept "oops" as a payment method.
RRSP: 18% of your 2025 income, max $33,810. On a $60K salary that's roughly $10,800 of fresh room. Deadline for the 2026 tax year: March 1, 2027. Mark it, forget it, panic about it in February like everyone else.
FHSA: $8,000 a year, $40,000 lifetime. Five years of maxing it and you're done, before any growth. It's the closest thing to a cheat code the government has ever handed out, and most people walk right past it.
Reading this on the blog? One money idea explained plainly every Wednesday, weekly stock market news every Sunday. Subscribe free and get the one-page TFSA cheat sheet.
The Canadian angle
You can open all three at either of the two brokerages young Canadians actually use, and honestly the choice matters less than the internet wants you to believe.
Wealthsimple is the easy on-ramp: clean app, no minimums, handles all the registered-account paperwork while you remain blissfully unaware it exists.
Questrade is for the control freaks (affectionate): deeper research tools, more knobs to turn.
Both hold ETFs in all three accounts. Both do automatic monthly contributions, which is the only feature that actually matters, because automation beats willpower the way compound interest beats a lottery ticket. Pick the app you'll actually open.
The takeaway
Two things this week, total time investment: 20 minutes:
Open an FHSA. Even with $100. The carry-forward clock starts when the account exists, not when you fund it. Every month without one is room you'll never get back.
Set up one automatic monthly transfer into your TFSA. Amount doesn't matter yet. The habit does. Starting small still counts as starting.
Then log into CRA My Account and check your actual room before contributing a cent. The 1% monthly over-contribution penalty is a completely avoidable way to lose money, and you're smarter than that.
And once your money is actually invested, you'll want to know what the markets are doing to it. That's what Sunday issues are for: here's our first week in markets.
One link worth your time
Wealthsimple's FHSA guide — the clearest walkthrough of the newest account, including what happens if you never buy. (Spoiler: nothing bad.)
Not financial advice, just a friend who reads the CRA website so you don't have to. See you Sunday.