Investment · TFSA
TFSA vs FHSA calculator.
Both grow tax-free. Only the FHSA gives a deduction, but its money is meant for a first home. Compare the two plans using the FHSA yearly and lifetime caps.
Saving $7,000 a year for 6 years at 5% in a TFSA alone gives $47,613.39. Filling the FHSA first and putting the 30% refund into a TFSA gives $60,717.22, because the deduction adds $12,000.00 of refunds. That edge only holds if the FHSA money goes toward a qualifying first home.
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How the two accounts differ
| TFSA | FHSA | |
|---|---|---|
| Contributions deductible? | No | Generally yes |
| Withdrawals | Tax-free, any reason | Tax-free if qualifying (first home); otherwise taxable or moved to RRSP/RRIF |
| Room | $7,000 for 2026; builds from 18 | $8,000 first year; carry-forward capped at $8,000; $40,000 cap |
The CRA says TFSA contributions are not deductible but income and withdrawals are generally tax-free. For the FHSA, it says contributions are generally deductible, qualifying first-home withdrawals are tax-free, room in the year you open your first FHSA is $8,000, carry-forward is capped at $8,000, and the total is capped at $40,000. If the money is not used for a home it can generally move to an RRSP or RRIF tax-deferred, or be withdrawn as taxable income.
How this comparison is built
Plan A puts every dollar in a TFSA. Plan B puts up to $8,000 a year in the FHSA (until $40,000 total) and the rest in the TFSA, then deposits each year’s refund (contribution × marginal rate) into the TFSA a year later. Example: $7,000 a year, 5%, 30%, 6 years: TFSA only $47,613.39; Plan B $60,717.22, made of $45,613.39 in the FHSA and $15,103.83 in the TFSA. The gap, $13,103.83, is the refunds and their growth.
It ignores FHSA carry-forward, assumes you have TFSA room for the refunds, and assumes the FHSA is used for a qualifying purchase. See the FHSA calculator for room and carry-forward detail.
Frequently asked questions
Is the FHSA better than the TFSA?
For money going to a first home, the deduction usually favours the FHSA if you are eligible. The TFSA is more flexible because withdrawals are tax-free for any reason. This tool shows the dollar gap under your assumptions.
Can the FHSA money be used for something other than a home?
Withdrawals that are not qualifying are taxable income, though the CRA says you can generally move the property to an RRSP or RRIF on a tax-deferred basis before the participation period ends.
Who can claim the FHSA deduction?
Only the holder of the FHSA can claim FHSA contributions as a tax deduction, according to the CRA. The refund in this tool is your marginal rate times the contribution.
How long can I keep an FHSA?
The CRA says the maximum participation period ends December 31 of the earliest of the 15th anniversary of opening your first FHSA, the year you turn 71, or the year after your first qualifying withdrawal.
Sources
Checked
- CRA: First Home Savings Account (FHSA)
- CRA: Participating in your FHSAs
- CRA: Closing your FHSAs
- CRA: What is a TFSA
- CRA: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE (TFSA dollar limit by year, 2009 to 2026)
Runs entirely in your browser. Nothing you type is sent or stored. This is an independent guide, not the CRA; confirm your own room in CRA My Account or your institution's records.
Not advice
A simplified comparison with the assumptions stated above; it does not check your eligibility for an FHSA. Not financial or tax advice.