Saving strategies for newcomers to Canada
October 21, 2026
If you’re a newcomer to Canada, you’re probably working towards a lot of different goals. You know you need to save money to build the life you want, but you also want to enjoy the present. Read on for some useful advice on saving, budgeting and four important savings plans in Canada. These tips could help you find ways to balance what you need now with your plans for the future.
Make a budget
Making a budget gives you an overview of your income and expenses, which can help you work toward your short-, medium- and long-term goals. Follow our step-by-step guide to get started. You can also use Alvie’s Monthly activity and Budget features in the Desjardins mobile services app.
Sticking to a budget and saving on a regular basis give you the best chance of reaching your goals.
Make saving a habit
The best way to save money is not to spend it. It might sound easy, but it can feel impossible at times.
You can start by setting realistic, measurable goals. They’ll guide you toward the best ways to save for your situation. The earlier you start, the easier it will be to reach your goal. To make things easier and help kickstart your saving habit, you can automate the process by setting up regular transfers.
Whether you’re saving up for a house, a car or a vacation, having a savings strategy can help you set yourself up for success. If you’re not sure where to start, reach out to a financial advisor. They can help you decide what to focus on and come up with a savings strategy that works for you.
Give your savings time
Whether you want to buy a home, pay for school or get ready for retirement, starting to save early can make a difference. In addition to the money you set aside, some savings and investment products can earn returns. The returns you earn and reinvest can help your savings grow gradually over time, especially thanks to compound interest.
Good to know
The longer your money stays invested, the more potential it has to grow. Before choosing a savings or investment solution, it helps to think about what you’re saving for, how long you’ll need to grow your money and how comfortable you are with risk. Then you can use the plans in the next section to help you save toward your goals.
Registered accounts to help you save
One advantage of saving in Canada is that, if you’re eligible, you can use registered savings plans that offer certain benefits. You can choose from these plans based on your goals to help you save for yourself or someone you care about. For example, maybe you’ve heard of the tax-free savings account (TFSA), registered retirement savings plan (RRSP), first home savings account (FHSA) or registered education savings plan (RESP). These four registered accounts are very popular and have many benefits.
What’s a TFSA?1
A tax-free savings account (TFSA) is a registered savings plan that lets you grow your money tax-free. That means you can withdraw money at any time (depending on the terms of your investment) without adding to your taxable income.*
TFSAs are great for saving for:
- Medium-term goals like vacations and renovations
- Unexpected events, like car repairs or having to replace an appliance
- Extra retirement income over the long term
Key points about TFSAs:
- Withdrawals are non-taxable, which means you don’t pay tax on money you take out.
- There’s an annual contribution limit (the maximum amount that can be added to the plan each year). Unused contribution room is carried forward.
- Avoid making frequent withdrawals so your money keeps growing and it’s easier to keep track of your contribution room.
- Your money grows tax-free until you need it and you have access to it at any time.
- Important: The TFSA annual contribution limit is available to tax residents of Canada. A temporary foreign worker does not accumulate TFSA contribution room.
How does an RRSP work?2
The registered retirement savings plan (RRSP) is designed mainly for long-term savings. It can help you gradually grow your savings for retirement while enjoying certain tax benefits. Because contributions are tax deductible, you can use them to reduce your taxable income. If you have a spouse, you can also contribute to their plan. You can check your notice of assessment to find out how much RRSP contribution room you have. Your contribution room grows based on the earned income you reported in your previous year’s tax return.2
RRSPs are mainly used to:
- Save for retirement over the long term.
- Reduce your taxable income and tax payable and potentially receive a tax refund in the short term. Note that money you withdraw from your RRSP is taxable.
RRSPs can also be used for other big goals, like:
- Buying a first home: The Home Buyers’ Plan (HBP) lets you withdraw up to $60,000 ($120,000 per couple) tax-free for a down payment, but you must repay it.*
- Going back to school: The Lifelong Learning Plan (LLP) lets you withdraw up to $20,000 tax-free over up to four years, but you must repay it.*
How does the FHSA work?3
The first home savings account (FHSA) is designed to help you save up to buy or build your first home. If you’re eligible, the plan can help you become a homeowner. However, there are certain rules and time limits that you need to know about before you contribute. The FHSA combines some of the benefits of RRSPs and TFSAs. For example:
- FHSA contributions are tax deductible, which can help reduce your taxable income.
- If you meet the eligibility requirements, withdrawals are tax-free as long as you use them to buy a qualifying home.
- The FHSA contribution limit is $8,000 a year and the lifetime limit is $40,000.
RRSP, TFSA or FHSA: Which is best?
As we’ve seen, there are advantages associated with all three of these savings plans. By combining them, you benefit from having multiple options. For example, if you’re planning on buying your first home, opening an FHSA is recommended to start accumulating contribution room. Remember that contributions to an FHSA don’t affect your RRSP or TFSA contribution room. So you can go ahead and contribute to those plans as well, according to their respective limits. Your FHSA and RRSP contributions can help reduce your taxable income. And if you don’t use all your contribution room in a given year, it will be automatically carried forward for all three plans.*
Compare savings plans to figure out the best fit for your needs and situation.
RESP: Save for a child’s education4
The registered education savings plan (RESP) is designed to help you save for the post-secondary education of one or more children. In addition to your contributions, there are Canadian and Quebec grants that the student can use once they enroll in eligible studies. This registered plan is also tax-sheltered. The beneficiary pays tax on the investment income and government grants when they receive an educational assistance payment.
Good to know
You must be a Canadian resident to accumulate TFSA, FHSA and RESP contribution room. RRSP contribution room is usually calculated based on your income earned and reported in Canada.
To find out the exact amount of your TFSA and RRSP contribution room, check the Canada Revenue Agency (CRA) website.
If you’re settling in Canada and already have savings or investments abroad, it could be a good idea to review your financial strategy. Depending on your situation, having part of your money in Canada could allow you, if you’re eligible, to use certain registered plans and benefit from their tax advantages. Our advisors can help you with this process. We also recommend reviewing your strategy with an accountant or tax specialist to make sure it’s right for your situation.
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* Certain terms and conditions apply.
1 To learn more about the terms, conditions and details that apply to TFSAs, visit the CRA website.
2 To learn more about the terms, conditions and details that apply to RRSPs, visit the CRA website.
3 To learn more about the terms, conditions and details that apply to FHSAs, visit the First Home Savings Account (FHSA) page on Canada.ca.
4 To learn more about the terms, conditions and details that apply to RESPs, visit the Registered Education Savings Plan page on Canada.ca.