Guide to growing your money: how to save when you're young?

15 June 2026 by National Bank
Drawing of a piggy bank with coins

If you recently graduated or started a career, it can be hard to make saving a top priority.  But saving when you’re young can be incredibly beneficial. Here’s our guide to the best strategies for growing your money right now. 

In this article :

Key takeaways 

  • Starting early means maximizing your money’s growth through compound interest. 
  • The right savings account depends on your goals. The TFSA stands out for its flexibility: by maximizing it early, you allow your money to grow tax-free. 
  • With a clear budget and automatic contributions, saving becomes simple and effective. 

What are the best savings accounts for young people? 

Your savings goal – whether it’s a trip or a down payment on your first condo – will determine the right financial product for you.  Each savings vehicule has its own characteristics and is better suited to certain projects. Here are some you might want to consider: 

HISAs (High Interest Savings Account) 

This account is ideal for short-term plans, such as financing a trip or paying off your student loans. The money you deposit will grow at a set interest rate, and you’ll have access to it at any time, with no penalties for withdrawals. 

→ Check out our article on how a savings account works

TFSAs (Tax-Free Savings Account) 

If you want to save but have no specific plan in mind, we recommend a TFSA. It’s a flexible investment vehicle that offers a better return than a chequing account by giving you access to multiple types of investments (like funds and stocks). Since earnings are tax-free, contributing early helps maximize the growth of your savings over time, sheltered from taxes. Plus, you can easily withdraw funds when you need them. 

→ Check out our article on TFSAs

FHSAs (First Home Savings Account)  

This account is specifically designed to help you save for the purchase of your first home. You can contribute up to $8,000 per year for a maximum of $40,000. Like an RRSP, it reduces your taxable income. 

→ Check out our article on FHSAs

RRSPs (Registered Retirement Savings Plan) 

Although it’s never too early to start saving for later in life, an RRSP isn’t just for retirement. It also reduces your taxable income, which means you pay less taxes. However, it’s designed to grow your money over the long term, and you’ll have to pay tax on every withdrawal you make – unless it’s for the purchase of your first home. 

→ Check out our article on why you should contribute to an RRSP

Ready to start saving?

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How much should you save based on your budget? 

You’re probably wondering what percentage of your salary you should set aside. It all depends on your needs and financial situation. Here’s how to determine how much you can save: 

  1. Calculate how much money you’d like to have saved after a certain period of time in order to carry out a project. 
  2. Determine how much you need to set aside from each paycheque to reach your goal. 
  3. Make a budget to ensure you can set aside this amount while still meeting your financial obligations. You can always use our online tool to put together your budget.  

To get a better idea of the amount you should save for specific projects: 

→ Check out our article on how much you should be saving

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Pro tip: No matter what your project is, the easiest way to achieve your goal is to save systematically. Set up automatic withdrawals from your chequing account to your savings account. This will help you stay disciplined and allow you to benefit from the magic of compound interest right away. Remember that a financial advisor can help you achieve your goals, whatever they may be.

What are the advantages of starting to save at a young age? 

The main advantage is pretty straightforward: the earlier you start investing in a savings account, the more time your money has to grow and the higher your returns will be. If you get into the habit of putting money aside, you’ll have more money to achieve your goals, such as moving into your own place, travelling or paying off your student loans.

Here are a few reasons to start saving early: 

Benefit from compound interest 

Think of it this way: you earn interest on every dollar you put into a savings account, and that interest earns interest over the years. This is called compound interest. The earlier you start saving, the more money your money will make. 

Here’s a concrete example: 

Maria, who’s 20, contributes $5,000 per year to her RRSP. Ali, who’s 30, deposits $10,000 per year into his. By the age of 40, both will have invested $100,000 in their savings accounts. Assuming both earn an annual return of 5% thanks to compound interest, Maria can expect to have approximately $172,000 in her RRSP and Ali approximately $131,000 in his, a difference of $41,000. (Fictitious example for reference purposes only.

→ Check out our article on compound interest and the rule of 72

Reduce your taxable income 

RRSPs and FHSAs don’t just help you grow your money for retirement or to buy your first home – they also help you pay less taxes. The government sets a tax rate based on your income, so the higher your salary, the more tax you pay. Contributing to an RRSP or an FHSA is a great way to lower your taxable income. All the money you put in during the year will be taken into account, and you may even get a tax refund. 

Here’s a concrete example: 

If your salary is $60,000 and you contribute $5,000 to your RRSP or FHSA, the government will calculate your tax based on an income of $55,000. Depending on the annual tax rate, this means you’ll pay approximately $1,700 less in taxes. If your contribution is $8,000, your taxable income will be $52,000 and you’ll save approximately $2,700. (Fictitious example for reference purposes only.)

With a TFSA, you don’t reduce your income tax, but you avoid paying tax on the returns you earn. As a result, the earlier you start contributing, the more time your money has to grow tax-free. And most importantly, these gains will never be taxed—not even when you withdraw them. 

Save for a down payment 

Are you hoping to buy a house or condo some day? Keep in mind that in the not-so-distant future, you’ll need a down payment of at least 5%, which is equivalent to $20,000 for a $400,000 property. In the case of an undivided property, you’ll need to make a down payment of 20%, or $80,000 for a $400,000 property. 

Two savings vehicles can help you get there: 

  • RRSP: Thanks to the Home Buyers’ Plan (HBP), you can withdraw up to $60,000 from your RRSP for a down payment on your first home. You’ll then have 15 years to repay the funds you withdraw. 
  • FHSA: This account allows you to set aside $40,000 for a down payment on your first home and, unlike an RRSP, you won’t have to repay this amount. 

The good news is that you can combine the money from both accounts to purchase your first home (and pay less tax for as long as you contribute to them). 

→ Check out our article on the HPB 

Financing your retirement 

Retirement probably feels a long way off. But if you want to enjoy it to the fullest, it’s a good idea to start saving while you’re still young. 

We recommend two options for growing your money over the long term: 

  • RRSP: This has the advantage of reducing your taxable income. 
  • TFSA: This allows your money to grow tax-free. 

To find out which strategy is best for you, consult a financial advisor. They can help you determine your investment profile and recommend the best savings vehicles for your needs. And remember: you’re never too young to start saving. 

Would you like to discuss your project with us? Contact your National Bank advisor. Don’t have a specialist in charge of your file? 

Make an appointment 

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Budget, Savings and investment, Investments