If they were given a limited amount of money to invest, more Canadians would invest in a Tax-Free Savings Account (TFSA) than in an RRSP.
According to a recent BMO study, 42% would invest in a TFSA while 37% would put it towards an RRSP.
"Whether saving for travel, the purchase of a home, a child's education or retirement, it's encouraging to see that Canadians are investing in their future by contributing to TFSAs and RRSPs," Serge Pépin, a BMO spokesman, said in a statement. "Both programs play important roles in helping Canadians save and invest in a tax-efficient manner. They complement each other and should be used in unison, so it's important that investors understand their differences."
A TFSA allows Canadians to easily earn tax-free investment income to meet their savings needs, while an RRSP is a tax-deferred savings vehicle designed specifically to help Canadians save for their retirement.
"Ideally, Canadians should be contributing to both a TFSA and an RRSP because they each offer distinct advantages," Pépin says.