What is a common feature of TFSA and RRSP?

The feature that both a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP) share is that they both allow for tax-free growth. This means that any investment income, such as interest, dividends, or capital gains generated within these accounts is not taxed while the money remains in the account. This characteristic is essential for individuals looking to maximize their investment growth over time, as it allows the full amount of investment earnings to compound without the immediate concern of tax implications.

For TFSAs, contributions are made with after-tax dollars, which means withdrawals are also tax-free. In the case of RRSPs, while contributions are made with pre-tax dollars and are tax-deductible, the tax-free growth aspect still applies until withdrawals are made in retirement when the account holder is typically in a lower tax bracket. Thus, this ability for both accounts to grow without being taxed during the accumulation phase is a key feature that benefits savers and investors alike, fostering a robust financial strategy.