TFSA, RRSP or FHSA: where to save in your first years in Canada

In your first year in Canada you have more savings room than you might expect in one account, and none at all in another. Knowing which is which saves you from parking money in the wrong place.

TFSA: available from day one

Your TFSA room starts in the year you become a Canadian resident, if you are 18 or older. You get the full annual limit for that year, even if you arrive in November. For 2026 the limit is $7,000.

• Unused room carries forward to future years.
• Withdrawals are tax-free, and the amount comes back as new room on January 1 of the following year.
• If you might move back to Europe one day: most European countries don't recognise the TFSA, so what it earns would become taxable there once you're resident again.

RRSP: usually nothing in your first year

RRSP room is 18% of your previous year's earned income in Canada, up to an annual maximum. Salary you earned abroad before arriving doesn't count. In practice, most newcomers have no RRSP room in their arrival year. It appears the following year, based on what you earned after you landed.

The RRSP deduction is worth the most when your tax rate is high, so there's no rush if your first year's income is modest.

FHSA: open it early if a first home is possible

The First Home Savings Account combines an RRSP-style deduction with a tax-free withdrawal for a first home. You can contribute $8,000 a year, up to $40,000 in total.

• You count as a first-time buyer if you haven't lived in a home that you or your spouse owned in the current year or the previous four calendar years. A home you owned and lived in abroad counts.
• Room only starts building once the account is open, so opening it early, even empty, can be worth it.
• Up to $8,000 of unused room carries forward to the next year.

RESP: the easiest 20% you'll ever get

The federal grant (CESG) adds 20% on the first $2,500 you contribute per child each year: up to $500 a year and $7,200 per child in total. Your child needs a Social Insurance Number. Grant room builds for each year your child lives in Canada, and unused room can be caught up gradually.

A sensible order for most newcomers

1. An emergency fund of three to six months of expenses.
2. RESP up to $2,500 per child per year, to get the full grant.
3. FHSA, if buying a first home in Canada is realistic.
4. TFSA with the rest of your long-term savings.
5. RRSP from your second year, especially once your income is in a higher bracket.

This order changes with your income, how long you plan to stay and when you might buy. The accounts you still hold back home matter too, and those are questions for a cross-border accountant.

Figures checked October 2026. Limits change every year; confirm current amounts on canada.ca before contributing. This guide is general information, not tax advice.