RRSP vs. TFSA: Why the tax free savings account is often the better choice for savers

RRSP or TFSA. Which one is better?Illustration by Chloe Cushman/National Post files

TORONTO — The registered retirement savings plan (RRSP) is one of the best-known tax shelters available to Canadians, particularly in the weeks before the annual contribution deadline, which is March 1 this year.

But financial experts say a tax free savings account (TFSA) is often a better choice over the long run.

The problem is, many people don’t know what makes a TFSA different from an RRSP. A report by Bank of Montreal estimates that 32 per cent of Canadians are in that camp.

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