Tax-free accounts
Can You Transfer an RRSP to a TFSA in Canada?
There is no tax-free transfer from an RRSP to a TFSA. You have to withdraw the money from your RRSP, pay tax on it, then contribute it to your TFSA if you have room. When that can still make sense.
Can I transfer money directly from my RRSP to my TFSA?
No. RRSPs can be transferred directly to other RRSPs, RRIFs and some other registered plans, but not to a TFSA. To move the money, you withdraw it from the RRSP and then contribute to the TFSA.
What does it cost to withdraw from an RRSP?
The withdrawal is added to your taxable income for the year, and your institution withholds tax at source. The withholding is a prepayment; your actual tax is worked out when you file.
| Withdrawal amount | Tax withheld (outside Quebec) |
|---|---|
| TopUp to $5,000 | 10% |
| $5,000.01 to $15,000 | 20% |
| Over $15,000 | 30% |
Outside Quebec, the withholding on a lump-sum withdrawal depends on the amount. Quebec residents have lower federal rates plus provincial withholding.
Do I lose my RRSP contribution room?
Yes. Unlike a TFSA, RRSP room used by the original contribution does not come back when you withdraw (except under the Home Buyers’ Plan and Lifelong Learning Plan, which must be repaid).
When can moving RRSP money to a TFSA make sense?
In a year your income is unusually low, such as a sabbatical, parental leave or early retirement before pensions start. The withdrawal is then taxed at a low rate, and the money can grow tax-free in a TFSA instead.
You need TFSA room for the contribution. The 2026 TFSA limit is $7,000; check your total room in CRA My Account.
What are the alternatives?
Leave the RRSP alone and contribute new savings to your TFSA instead; use the Home Buyers’ Plan if you are buying a first home; or plan withdrawals over several low-income years to spread the tax.
Keep reading
Tax-free accountsTFSA vs RRSP: Which Is Better?When a TFSA beats an RRSP and vice versa, by income level, with the 2026 limits and the rules that decide it.
Tax-free accountsTFSA Withdrawal Rules in CanadaTFSA withdrawals are tax-free and can be made at any time, but the room only comes back on January 1 of the next year. How to withdraw without creating an overcontribution.- Tax-free accountsRRSP Contribution Limit and Deadline 2026The 2026 RRSP limit is 18% of your 2025 earned income, up to $33,810. The deadline to contribute for the 2026 tax year is March 1, 2027.
Tax-free accountsCan You Use the FHSA and Home Buyers’ Plan Together in Canada?Yes. First-time buyers can withdraw from an FHSA and use the RRSP Home Buyers’ Plan for the same home, which can put up to $100,000 per person toward a down payment, plus FHSA growth.
Official sources and further reading
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