The Ultimate Savings Account Guide

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Mar 22, 2024
8 min

Navigating the ocean of saving and investment options might seem daunting, but it's key to building a strong financial future and achieving your dreams. Explore the various saving vehicles in Quebec, simplified to light your way to financial security and fulfill your ambitions.

Whether you're saving for retirement, education, purchasing a home, or simply looking to grow your wealth, there's a saving vehicle that fits your goals. 

The programs mentioned cover various options, from registered plans offering tax advantages to accounts providing flexibility for short- or long-term projects.

Comparative chart 

Scroll through the chart below for a quick and informed comparison of the various saving options available to you. Featuring the main objective, maximum contributions, tax benefits, and implications upon withdrawal, this chart is a great starting point.

Maximum contribution and other advantages Tax implications on contribution Tax implications on withdrawal
Retirement Savings
18% of the previous year's income up to a fixed maximum Deductible contributions Taxable upon withdrawal
Retirement Savings
- The RRSP can be transferred to an RRIF without tax impact Taxable upon withdrawal
Tax-Free Savings
Adjusted annually (cumulative contribution limit) Withdrawals are tax-free Not taxable
First Home Purchase
Adjusted annually (cumulative contribution limit) Withdrawals are tax-free Tax-free withdrawals for the purchase of a first residence
Education Savings
  • $50,000 per beneficiary
  • Government grants
Non-deductible contributions Investment returns and grants are taxable
Disability Savings
  • $200,000 lifetime
  • Government grants
Non-deductible contributions Investment returns and grants are taxable
Voluntary Retirement Savings (Small Businesses)
  • The RRSP and the VRSP share the same contribution maximum.
  • Employer contribution tax-free
Tax benefits for employers and employees Taxable upon withdrawal
Locked-in Retirement Savings
  • Serves to transfer the accumulated amount from the retirement plan or pension fund of your former employer to an individual plan
  • May be held until age 71. At this age, you must either cash out the funds or transfer them into an RRIF or a LIF, which will pay an annuity.
The transfer into the LIRA is tax-sheltered Taxable upon withdrawal
Life Income Fund
Transfer from LIRA Transfer into the LIF is tax-sheltered Taxable upon withdrawal
Individual Pension Plan (business owners)
The contributions (as a % of salary) allowed vary based on certain criteria including age but are generally higher than RRSP The contributions are made by the company and not by the individual. The contributions and the plan's administrative fees are deductible for the company. Taxable upon withdrawal

Saving Vehicles Demystified 

Deepen your understanding of different savings programs through detailed explanations. This section will provide you with a nuanced overview of each plan, highlighting specific features and benefits that help align each saving vehicle with your financial plans.

RRSP: Your Retirement Ally 

The Registered Retirement Savings Plan (RRSP) is a cornerstone for building a comfortable retirement. By choosing to invest in an RRSP, you not only benefit from a reduction in your taxable income through deductible contributions but also prepare for your retirement years by accumulating tax-sheltered savings until the time of withdrawal. 

When withdrawn, the funds are taxed, often at a lower rate given the reduced income in retirement. 

To discover how to maximize your retirement savings through the RRSP, read our complete guide on RRSPs.

RRIF: Smooth Transition into Retirement 

The Registered Retirement Income Fund (RRIF) is the next step after the RRSP. It is perfect for withdrawing your retirement savings in a structured manner, transforming your savings into a regular income stream during your retirement years. 

Although withdrawals are taxable, they can be optimized to minimize the tax impact.

TFSA: Flexibility and Tax-Free Growth 

The Tax-Free Savings Account (TFSA) is your tool for saving without a goal limit while benefiting from tax-free growth. 

Whether it's for a short-term project or a more long-term endeavour, TFSA funds can be withdrawn at any time tax-free, making it one of the most flexible options. 

Curious about how the TFSA can help you reach your short and long-term financial goals? Explore all the details of the TFSA here

FHSA: Your Launchpad for Buying a First Home 

The First Home Savings Account (FHSA) is modelled after the TFSA, focusing, however, on a singular grand objective: the acquisition of a first residence. 

Withdrawals for this specific goal remain tax-free, making homeownership more accessible. 

Ready to make your first move toward purchasing your home? Learn how the FHSA can assist you.

RESP: Investing in Educational Futures 

With the Registered Education Savings Plan (RESP), prepare for the educational future of your children or grandchildren. Contributions benefit from government grants that increase the capital available for education. 

Amounts withdrawn for educational expenses are partially taxed, mainly on the growth portion and the grants. 

Concerned about the educational future of your children or grandchildren? Discover the benefits of the RESP here.

RDSP: Financial Security for People with Disabilities 

The Registered Disability Savings Plan (RDSP) is a savings plan specially designed for individuals living with a significant and permanent disability. 

It provides a savings environment encouraged by government incentives and aims for long-term financial security, with certain conditions related to withdrawals.

VRSP: The Retirement Solution for Small Businesses 

The Voluntary Retirement Savings Plan (VRSP) is suited for employees of small businesses without access to a traditional pension plan. 

It encourages saving in a flexible and tax-efficient manner, beneficial for both employers and employees.

LIRA: Protecting Your Post-Career Retirement 

The Locked-In Retirement Account (LIRA) allows you to keep the funds accumulated in a previous pension plan. 

The rules of this account ensure that the savings will be used for retirement, with taxable withdrawals following well-defined conditions.

LIF: Generating Regular Income in Retirement 

The Life Income Fund (LIF) leverages accumulated retirement savings by converting them into regular and taxable income. 

With rules governing minimum and maximum withdrawal amounts, the LIF ensures steady financial support during retirement.

IPP: Towards a Peaceful Retirement for the Self-Employed 

The Individual Pension Plan (IPP) is aimed at self-employed individuals and entrepreneurs wishing to build their retirement security. 

It offers a flexible structure enabling the benefit of attractive tax advantages both at the time of contribution and upon withdrawal.

Navigate Your Financial Future 

Each saving vehicle offers its own set of benefits, designed to meet various needs and goals, whether it's for a peaceful retirement, financing an education, or purchasing a first home. 

Taking the time to examine your options and understanding how each plan can align with your personal goals is crucial for building a secure financial future. On this journey towards achieving your financial aspirations, information is your best ally. 


We hope this guide has illuminated your path, and we encourage you to explore each option in depth through the resources available on our blog.

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