Why should you open a registered retirement savings plan (RRSP)? This account type is often described as “tax-advantaged,” meaning it offers a tax-efficient way for savers and investors to build wealth for the future, usually for retirement. To maximize its potential, it helps to know the differences between an RRSP and other kinds of registered accounts, like the tax-free savings account (TFSA) and first home savings account (FHSA). Plus, not all RRSPs are built the same—you’ll want to compare the saving and/or investing options they offer, as well as their interest rates and fees. Here’s everything you need to know to set yourself up for RRSP success.
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How to choose an RRSP
Before diving into our picks for the best RRSPs, think about how you want to use the account: saving or investing. Some RRSPs serve as high-interest savings account (HISAs), offering a better rate of return on your savings than a regular savings account. Some allow you to hold guaranteed investment certificates (GICs). And some allow you to invest in other RRSP-qualified investments, including stocks and bonds, exchange-traded funds (ETFs) and mutual funds. Accounts intended for investing typically have less competitive rates on savings, but you can do more with them. Plus, investing can provide greater returns over long periods than saving alone. Here’s a summary of the best RRSPs, along with your investment options.
Compare RRSP savings accounts
Best RRSP savings accounts
EQ Bank RSP Savings Account*
At 3.00%, EQ Bank offers one of the highest interest rates available on an RRSP savings account in Canada. And you can lock in at an even higher rate by purchasing an EQ Bank GIC. Owned and operated by Equitable Bank, EQ Bank is online-only, which means doing all of your banking through its website or app. All deposits up to $100,000 are CDIC-insured—just like with the big banks—and residents from across Canada, except for Quebec, can open this account.
Interest rate: 3.00%
Minimum balance: None
Insurance: CDIC
Hubert Financial
A regular, non-promotional interest rate of 3.65% along with no banking fees puts the Hubert RRSP savings account ahead of most in Canada. Hubert is an online-only bank so you can do everything from opening an account to everyday banking through its website or app. Hubert is the online division of Access Credit Union and Manitoba Deposit Guarantee Insurance protects all your deposits, regardless of the amount. There’s no minimum balance or monthly account fees. This account is available to residents across Canada, except for Quebec.
Insurance: Deposit Guarantee Corporation of Manitoba
Achieva Financial
With the Achieva Financial RRSP savings account, you get all the benefits of a regular savings account alongside a competitive 3.60% interest rate, with no fees. Plus, the account offers an unusual perk: Achieva will credit your account $1 per month if you opt in to electronic document delivery. Your deposits of any amount are guaranteed by the Deposit Guarantee Corporation of Manitoba and accounts are available to residents across Canada, including Quebec.
Interest rate: 3.60%
Minimum balance: None
Insurance: Deposit Guarantee Corporation of Manitoba
Best big bank RRSP savings rates
National Bank of Canada
The National Bank RRSP savings account offers Cash Advantage Solutions for registered plans such as your RRSP savings. With a minimum $1 investment, you can put away money and earn 1.10% interest. (You can withdraw the money at any time.) While this rate is quite low when compared to some other accounts on this page, it’s higher than the rates from the other Big Six banks, and the account is largely intended for holding investments, including funds offered by National Bank Investments Inc.
Interest rate: 1.10%
Minimum balance: $1
Insurance: CDIC
RBC
If you already bank with RBC, you may be tempted to keep all of your money with one institution, especially if you’re simply “parking” your funds in a savings account while you decide where to invest it. If that’s you, RBC is a good option among big banks in Canada, offering an interest rate of 0.90%
Interest rate: 0.90%
Minimum balance: None
Insurance: CDIC
Compare RRSP GIC rates
Best RRSP GIC rates (1-year term)
In addition to investments and savings accounts, you can hold RRSP savings in a guaranteed investment certificate (GIC) where you deposit your money for a given amount of time and at a specified interest rate. When you withdraw at the end of the period, you get back your principal plus interest—guaranteed.
Motive Financial
Motive Financial is an online-only bank that’s a division of Canadian Western Bank which operates out of Alberta. With Motive Financial, you can snag an interest rate of 5.40% on one-year RRSP GIC deposits, and all deposits of up to $100,000 are covered by CDIC insurance. There’s a minimum balance of $500.
Oaken Financial
Also an online bank, Oaken Financial is associated with Home Trust Company, an independent trust that has operated in Canada since 1987. Oaken has a one-year RRSP GIC with an interest rate of 5.35%. Oaken offers CDIC insurance on deposits of up to $100,000.
EQ Bank
EQ Bank is an online subsidiary of Equitable Bank, which manages more than $65 billion in assets and is Canada’s seventh-largest bank. When you invest in a one-year RRSP GIC with EQ Bank, you get a 5.15% return, and your deposits of up to $100,000 are CDIC-protected.
Best RRSP investment accounts
Best robo-advisors for RRSP investing• Questwealth Portfolio
• Wealthsimple InvestBest online brokers for RRSP investing• For passive investing: Wealthsimple Trade
• For active traders: Questrade
• For mutual funds: Qtrade
Best robo-advisors for RRSP investing
Questwealth Portfolios
Whether you’re just starting out with investing in RRSPs or want a “set it and forget it” component to complement your other investments, a robo-advisor like Questwealth Portfolios offers an all-in-one solution tailored to your risk tolerance and objectives through an online questionnaire you’re given when you sign up. Questwealth’s fees are among the lowest in the business, ranging from 0.2% to 0.25%, depending on the size of your portfolio.
You can choose from five broad portfolio types, ranging from aggressive (with 98% equity) to conservative (which has a mix of 80% fixed income and 20% equity). Based on your responses to its risk tolerance and goals questionnaire, the platform will recommend a type that meets your investment needs and level of comfort. Your portfolio is then actively managed, adjusting with market conditions. Features like tax-loss harvesting and automated dividend reinvestment are included to maximize your returns—all without you having to lift a finger. The minimum investment required is $1,000, which makes investing with Questwealth quite accessible.
And, though Questwealth is an online-first platform, Questwealth is regulated by the Investment Industry Regulatory Organization of Canada (IIROC) and is a member of Canadian Investor Protection Fund (CIPF), just like the big banks. The platform has more than $20 billion in assets under management and has won multiple awards, including Canada’s Best Managed Companies. Finally, if you need help, you can connect with an agent over live chat or phone.
Wealthsimple Invest
Like Questwealth Portfolios, Wealthsimple is a robo-advisor firm that matches you to a low-cost portfolio of diversified ETFs for a one-stop, hands-off RRSP investing experience. However, it is not the same as the Questwealth model, in that Wealthsimple Invest truly adheres to the principles of passive investing which means that there are no managers actively tweaking portfolios to adjust to market conditions. The goal is to match the market, not beat it, which is arguably the most effective and sustainable strategy long term, in part because the fees are low and don’t take a big bite out of your returns.
In terms of portfolios, Wealthsimple’s offerings correlate with varying risk scores—from conservative to growth—each featuring a different mix of equity and fixed income. There are even Halal and socially responsible portfolios. Another Wealthsimple feature is the ability to round up your everyday purchases to the nearest dollar and invest the difference using your debit or credit card. So, let’s say you bought a cup of coffee for $2.75; Wealthsimple will automatically invest $0.25. Designed to be extremely user-friendly, Wealthsimple’s site and app are easy to use and notable for their sleek mobile experience.
Wealthsimple’s fees are slightly higher than Questwealth’s, ranging from 0.4% to 0.5%, depending on how much you have invested. But you should know that the fees on your first $10,000 invested are waived for the first year. Also, there’s no minimum account amount. Wealthsimple is regulated by the IIROC and is a member of the CIPF, just like the big banks. It has more than $8.4 billion in assets under management and 1.5 million clients.
Best online brokers for RRSP investing
If you prefer to make your individual investments rather than relying on pre-built portfolios, an online brokerage can help achieve your RRSP investment goals.
For passive ETF investors: Wealthsimple Trade
An absolute game-changer, Wealthsimple Trade is the only trading platform in Canada with no commissions. With most other online brokerages charging anywhere from $4.95 to $9.99 per trade, using a Wealthsimple Trade account will save you big from the first trade you complete.
Wealthsimple Trade is ideal for passive investors looking to buy diversified ETFs listed on the TSX and NEO Canadian stock exchanges. This means you can track the performance of specific market segments, indexes and the global stock market. Wealthsimple Trade offers RRSP and TFSA options.
This is a simple platform with no-in depth analytics tools or stock screeners. Additionally, account holders are not permitted to hold U.S. dollars, so you can’t leverage the strategy of Norbert’s Gambit to minimize currency fees when buying U.S. equities. You will however have to opt into using Plus for an additional $10/month to fully leverage Norbert’s Gambit. However, these are features more geared towards active investors—not passive ETF investors, for whom Wealthsimple Trade is hard to beat.
Account, maintenance and low-activity fees: $0
Commissions: $0
Portfolio: Access to thousands of ETFs listed on the TSX and NEO exchanges (including popular all-in-one funds from Vanguard and iShares)
Foreign currency fees: 1.5% when buying and selling equities listed on the NYSE
For more active/experienced investors: Questrade
Questrade boasts some of the lowest commission fees in the business. It costs nothing to buy ETFs, and buying or selling equities is only $0.01 per share (with a minimum charge of $4.95 up to $9.95). This is far more appealing than the high flat rates charged by the big banks, and there are no quarterly or monthly account fees or low activity fees. With a Questrade account (also offering spousal accounts), you aren’t limited to trading stocks and ETFs. You can trade on IPOs, precious metals and more, and with the ability to hold U.S. dollars, you can leverage Norbert’s Gambit to minimize the cost of currency conversions when buying and selling U.S. equities listed directly on the NYSE. A Questrade account gets you access to research tools like intraday Trader and Investment reports, and you can add tools from Questrade partners like Wealthica and VectorVest.
Account, maintenance and low-activity fees: $0
Commissions: $0 when buying ETFs, $0.01 per share on equities (min $4.95, maximum $9.95)
Portfolio: Ability to hold U.S. dollars and leverage the strategy known as Norbert’s Gambit Foreign to minimize foreign fees when trading equities listed on the NYSE
For mutual fund investors: Qtrade
At a flat rate of $8.75 per trade, Qtrade charges a higher commission on stocks and ETFs than Questrade, but it eliminates commissions on mutual funds, which might be a savvy trade-off for those looking to invest in their RRSPs this way. There’s a $25 administration fee billed quarterly, but if you establish recurring deposits or hold a minimum of $25,000, you can get a waiver. Qtrade enjoys a reputation for offering stellar customer service and was recently awarded to be the best online self-directed brokerage experience by Surviscor.
Account fees: $25 per quarter (can be waived when certain conditions are met)
Commissions: $8.75 per trade for most equities
Good to know about RRSPs
Once you’ve received your 2023 notice of assessment (after filing your taxes), check that you haven’t accidentally put more money in than your contribution limit allows. Canadians are allowed to overcontribute to their RRSP by up to $2,000 at any time. However, if you exceed that buffer, the amount you overcontributed is subject to a penalty of 1% per month, plus interest. In a recent column, Certified Financial Planner Jason Heath explains the steps you should take to correct the mistake.
—MoneySense editors
What is an RRSP?
An RRSP is an investment vehicle that is registered with the Canadian federal government. It is sometimes referred to as an RSP, short for retirement savings plan. And if you do business with francophone financial institutions, know that RRSP in French is a régime enregistré d’épargne‑retraite (REER).
RRSPs are often described as being “tax-advantaged.” That means you don’t pay income tax on the amount you are contributing to an RRSP, in the year you earn that contribution. However, you will have to pay income tax when you withdraw money during your retirement. The advantage is built on the assumption that your income is higher now than it will be in retirement. If you plan things right, you will be in a lower tax bracket in retirement, meaning that you pay less tax on your withdrawals than you saved initially by stashing your money inside an RRSP.
What is an RRSP good for? Well, there are two big benefits to saving or investing inside an RRSP: One, your money is allowed to grow tax-free until you need to withdraw it; and two, you get an immediate break on the income tax you would otherwise pay on the amount you contribute each year, up to your annual limit.
You can contribute to an RRSP until the year you turn 71, at which point it must be transferred to a registered retirement income fund (RRIF) and you must begin to withdraw the money as taxable income.
Types of RRSPs
You can use an RRSP to save money for your own retirement, as well as your spouse’s. If your employer offers a group RRSP and will match a portion of your contributions, sign up for it. Your employer’s contribution alone gives you a no-risk return on your investment that would be tough to match anywhere.
How many RRSPs can you have?
It’s not unusual to have several RRSPs, and in fact, it’s a good idea to diversify. For example, you might have some of your RRSP savings in a long-term investment, some in a shorter-term GIC, and yet more in a savings account. This allows you to access money as you need it and gains you access to many different products with less overall risk.
The only limit you need to concern yourself with is your total contribution room, which is the sum total of all your RRSP accounts. Each year you’ll receive a notice of this amount after you file your taxes, or you can log in to your CRA account at any time to make sure you don’t over-contribute.
What investments can you hold inside an RRSP?
There’s a wide variety of investments you can hold inside an RRSP—and you don’t have to stick to just one, or even two. Depending on your investment horizon (the amount of time until you need to draw money from your RRSP in retirement), risk tolerance and other personal factors, using a mix of low-risk savings accounts and GICs for safety, perhaps along with exchange-traded funds (ETFs) and even individual stocks for growth, can offer diversification.
Note that not every kind of investment can be held in an RRSP. Non-qualified investments include: investing in businesses in which you hold an interest of 10% or higher, precious metals that are not gold or silver, commodity futures, private holding companies or private foreign corporations, your own debt, and personal property.
What’s my RRSP contribution limit?
Every year, you can contribute up to 18% of your earned income from the previous tax year to your RRSP—up to a specified limit for the year. For 2024, the annual limit is $31,560 (up from $30,780 in 2023). However, your individual contribution limit is also based on unused contribution room from previous tax years, as well as any contributions you have made to a company-sponsored pension plan. The easiest way to determine your RRSP contribution room is to use a calculator like the one below.
Two reasons to withdraw from your RRSP before retirement
In addition to giving you a tax-deferred place to save towards your retirement goals, an RRSP is a tool you can tap into to help with two major life expenses: buying your first home and pursuing further education. In both cases, you can withdraw a portion of your RRSP funds without having to pay tax or penalties, as long as you adhere to a specified repayment plan.
Home Buyers’ Plan (HBP)
The Home Buyers’ Plan (HBP) is a program that allows first-time home buyers to leverage their tax-deductible RRSP savings to use as a downpayment on their home. It essentially allows home buyers to borrow up to $35,000 per person from their RRSPs and then repay that money back into their RRSPs over a 15-year period. Any failure to meet the scheduled repayments in any given year will result in having the unpaid amount taxed at your top rate.
Lifelong Learning Plan (LLP)
The Lifelong Learning Plan (LLP) allows RRSP holders to withdraw money for the purpose of pursuing additional education. You can withdraw up to $10,000 per year and up to a total of $20,000, and you have 10 years to repay the full amount. You can use the LLP to pay for your own education or your spouse’s, but not your children’s (to save up for that, consider opening an RESP). Once your LLP loan is repaid in full, you can use the program again.
RRSP vs. TFSA: Which should you choose?
Unlike with an RRSP, contributions to a tax-free savings account (TFSA) are not tax-deductible. However, TFSAs offer tax-free withdrawals at any time. There are some circumstances that would make a TFSA a smarter choice. If you think you might need the money before your retirement, a TFSA will allow you to withdraw as much as you want, whenever you want. The flip-side of that equation, however, is that easier access to your money might derail your retirement planning in the long run.
Remember that the tax advantage of an RRSP relies on the assumption that you will be in a lower tax bracket when withdrawing the money in retirement than when you are contributing to it. So, if you earn less than $50,000, it makes more sense from a tax perspective to invest the money in a TFSA. If you earn more than $50,000 and are investing solely in your retirement (and perhaps saving for a home or planning more education), an RRSP makes more sense. Or, if you have enough money to spread around, consider investing in both!
Frequently asked questions
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