Tax Free Savings Account (TFSA) Comparison Calculator (Canadian)
Savings inputs: |
Investment taxes: |
Totals After Taxes |
Annual Balance of Accounts |
This is an ordinary, taxable, savings account. There are no restrictions for deposits or withdrawals, but all earnings and capital gains are taxable. In addition, there is no tax deduction to any deposits to an ordinary taxable account.
This is an account that allows Canadians 18 and older to invest up to a certain amount per year. Any investment income earned is tax free (including interest and capital gains), and withdrawals can be made at any time for any purpose. For more details on how a TFSA works please see https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account.html.
This is a savings account set up primarily for retirement savings. Contributions to a RRSP are generally tax-deductible but withdrawals are taxed at your normal income tax rates. There are additional restrictions to how you can withdraw funds from this type of account. For complete details of the how a RRSP compares to a TFSA, please see https://www.canada.ca/en/financial-consumer-agency/services/retirement-planning/comparing-savings-options.html.
Any existing balance for the accounts.
Your periodic contribution. All contributions are assumed to happen at the beginning of the period.
The frequency of your contributions. The options are weekly, every other week, twice monthly, monthly, quarterly, semi-annually or Annually. All contributions are assumed to be made at the beginning of the period.
Number of years you plan on making contributions.
This is the annual rate of return you expect from your investments. The actual rate of return is largely dependent on the type of investments you select. For example, the total return including dividends of the S&P/TSX Composite Index for the 10 year period from December 31, 2014 through December 31, 2024 was 8.7% (source www.spglobal.com). Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Your marginal income tax rate. This is used to estimate the amount of tax you will pay on your RRSP and taxable account options.
If you check this box the calculator will assume contributions to the RRSP investment are tax-deductible when they are made. The calculator will then increase the contribution amount for the RRSP investment by the amount required to make the net contribution equal to the investments that have contributions made on an after-tax basis.