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7 smart ways to use your tax refund 

January 30, 2024

So you've filed your taxes—what a relief! If you're expecting a refund, the big question is: how will you use it? Here are 7 ideas that we've put together for you:

1. Pay off your debt so you can make ends meet more easily

By paying off your debt, in particular what you owe on credit cards and lines of credit, both of which tend to have higher interest rates, you'll pay less interest on that debt. That way, you'll eventually be able to free up money that you can put towards other things.

Use the Manage debt feature available on AccèsD to estimate your debt load. Get personalized advice to help you manage and repay your loans.

2. Build an emergency fund to protect against the unexpected

An emergency fund is an amount of money you set aside for any unexpected expenses. This helps keep you from having to turn to various types of credit, since the high interest can add up quickly. The general recommendation is to save enough money to cover 3 to 6 months of regular expenses. Your future self will thank you!

Start building your emergency fund by setting aside the money from your tax refund, then add small amounts to it on an ongoing basis depending on what you can afford. Over time, you'll see a big difference.

Ideally, you should open a separate account in which you'll put the money you've set aside, such as a savings account. A tax-free savings account (TFSA) is a great choice, because it allows you to save your money tax-free and withdrawals can be flexible (depending on the investment products you choose). Use the Manage debt feature available on AccèsD to estimate your debt load. Get personalized advice to help you manage and repay your loans.

3. Consider contributing to an RESP to help your loved ones complete their post-secondary education

Help a loved one plan their post-secondary education while receiving government grants. Did you know that for every dollar you put in a loved one's registered education savings plan (RESP), the federal government will add a minimum of 20% of that to your plan? 

The Quebec government provides an additional 10% incentive. This means that the grants received from both levels of government add up to 30% of what you invest1. Ontario does not offer a similar incentive.

The sooner you open an RESP, the more time your investments will have to grow tax-free. 

Consider also that your contribution to your RRSP2 could make you eligible for a tax refund too (we're already partially sharing tip 4). You can then put this amount in the RESP of a loved one, meaning that you benefit even more!

4. Contributing to an RRSP offers several advantages: 

You can leverage it for its tax benefits 

By using your tax refund to contribute to your registered retirement savings plan (RRSP), you'll reduce your taxable income and enjoy potential tax savings.

It's also an excellent way to benefit from allowances and credits based on family income. 

You can use it to reach your retirement goals more quickly 

By re-investing your tax refund in your RRSP, you'll boost your retirement savings even more. Now's the time to take advantage of unused contribution room. Keep in mind that the sooner in the year you contribute, the more time your investments will have to grow tax-free and the sooner you can achieve your retirement savings.

5. Pay extra to pay down your mortgage more quickly 

Shorten the duration of your mortgage by paying up to 15% of your initial loan amount per calendar year during the term, without facing any penalties2. Making payments on the principal can help you save on interest. It's also a way to prepare for a potential increase in interest rates when you renew your mortgage, because reducing your loan amount could help you keep your payments as low as possible. Worth considering!

How can you get the most out of your money? Contribute to your RRSP and use your tax refund to pay down your mortgage.

If you're close to retirement, it's a great way to start reducing your financial obligations.

6. Use your TFSA to save for a goal 

A TFSA can be very flexible when it comes time to use your savings for goals, depending on the investment vehicle you choose. We mentioned emergency funds earlier, but a TFSA is also a good way to save for things like a trip, renovation or major purchase.

Here are the key features:

  • The investment income is tax-free.
  • Withdrawals are tax-free2. The amount is added back to your contribution room the following year. You can then re-contribute the equivalent of the amount withdrawn.
  • You can access your money at any time if they're investments that can be easily converted to cash..

7. Discover the FHSA, a springboard for first-time buyers

The first home savings account (FHSA) is the latest addition to the family of tax-efficient investment vehicles. It allows you to save tax-free for a down payment on your first qualifying home.

Here are some of the benefits of the FHSA:

  • Contributions reduce your taxable income and could result in tax savings.
  • Your savings grow tax-free.
  • Any withdrawals you make to buy your first eligible home are tax-free.

What if you don't qualify for the FHSA, but your children do? If you can, give them money to contribute to their FHSA. You'll help them get closer to their dream of home ownership. 

Not sure which option is right for you? An analysis of your situation with someone on our team will help you choose the best strategy.

1 There is a limit on the value of government grants that you can receive. For more information, visit 

2 Based on applicable conditions.