Best RRSP Savings Accounts In Canada For December 2024

We’ve compared 20 RRSP accounts at 19 nationally available banks and credit unions to find some of the best options available. See below to learn more about why we picked each account, the pros and cons, and to access individual bank reviews.

To create this list, Forbes Advisor analyzed 20 RRSP specific savings accounts at 39 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each account on 19 data points within the categories of fees, access, customer experience, digital experience, annual percentage yield, plus the minimums and balance needed to avoid a monthly fee.

The following is the weighting assigned to each category:

• APY: 70%
• Fees: 10%
• Customer experience: 5%
• Digital experience: 5%
• Minimum deposit requirement: 5%
• Balance to avoid monthly fee: 5%

Specific characteristics taken into consideration within each category included monthly fee, ability to waive the monthly fee, overdraft fee, NSF fee, other fees, ATM network, branch access, Better Business Bureau rating, Trustpilot rating, live chat availability, mobile app ratings, online bill pay availability, online banking access, minimum deposit requirements and minimum balance requirements.

RRSP Savings accounts offering no or very low fees scored the highest, as did those offering low minimum requirements and high customer service and digital experience scores. To appear on this list, the RRSP savings account must be nationally available.

Our research is based on information from the following financial institutions: RBC, TD, BMO, National Bank, CIBC, Scotiabank, UNI Financial, Canadian Western Bank, Coast Capital Savings, Digital Commerce Bank, EQ Bank, First Nations Bank of Canada, Laurentian Bank, Manulife Bank, Motus Bank, Peoples Bank of Canada, Simplii Financial, Tangerine Bank, VanCity, VersaBank, HSBC, Home Bank, ICICI Bank Canada, SBI Canada Bank, CTBC Bank, Bank of China (Canada), KEB Hana Bank Canada, Shinhan Bank Canada, Meridian Credit Union, Servus Credit Union, Envision Financial, Steinbach Credit Union, Affinity Credit Union, Prospera Credit Union, Conexus Credit Union, ConnectFirst Credit Union, Access Credit Union, Assiniboine Credit Union, Innovation Credit Union.

An RRSP savings account is a government-supported savings account meant to help you save for retirement. It is an account that allows you to make contributions tax-free up to a certain yearly limit up until the year you turn 71. Since you don’t have to pay tax on your contributions, they can help lower your tax bill for the year that you make them. That being said, as soon as you withdraw any amount from your RRSP, it is taxed as income.

As soon as Canadians start working, they build RRSP contribution room, which is the amount they can deposit into their RRSP every year without penalty. You can make RRSP contributions in the form of lump sums at specific times throughout the year. This option is popular as people look for ways to reduce their taxable income before the RRSP contribution deadline of late February/early March and before the tax filing deadline of April 30, 2024. Another option is to make regular contributions throughout the year via pre-authorized deposits.

Contributions to a regular savings account can be used for any purpose, not just retirement, and are taxed as income each year. RRSP contributions are solely for the purpose of long-term savings or purchasing a first home through the Home Buyer’s Plan. Contributions can be made up until the year you turn 71 and then you must start making withdrawals. The idea is, by the time you turn 71, you will have retired and therefore, your contributions will be taxed at a lower rate. When it comes to a regular savings account, you can continue to make contributions and withdrawals no matter your age.

You can open an RRSP at any bank where they are available either in-person at a branch or online. You must meet the following eligibility criteria set by the CRA:

• Be a Canadian resident
• Have a Social Insurance Number (SIN)
• Have earned income and file a tax return in Canada
• Open and contribute to a plan no later than December 31 of the year you turn 71.

The bank where you open the account will take care of registering the account with the federal government. They may also offer various investment options to help you grow your money within your RRSP, such as stocks, mutual funds or GICs.

How to Choose an RRSP

When comparing RRSP options, it’s important to first understand whether you want a self-directed plan, where you can choose a wide range of investment types in one account and have a greater say in how your account is managed, or a basic RRSP account that has limitations on what you can hold in your account; for example, mutual funds or GICs, but not equities. A self-directed RRSP gives you more diversification across asset classes, but may also be more volatile.

Once you make that decision, then you can compare plans based on features such as fees, APY and what investments you can purchase.

There are three main ways to use your RRSP:

1. Make contributions to your plan.

2. Claim a tax deduction.

3. Withdraw funds, preferably at retirement.

RRSP contributions

It’s never too early to start saving for retirement, so prudent investors make sure to contribute each year to the annual contribution limit, which is 18% of your earned income up to the annually announced limit. The contribution limit for the 2023 tax year is $30,780. The deadline to contribute to your RRSP is 60 days following the end of the previous tax year; for example, the deadline for contributing to an RRSP for the 2023 tax year is February 29, 2024.

Each year when you file your taxes, the CRA will calculate your annual RRSP contribution limit. If you do not use your entire deduction each year, the amount you have left is automatically carried forward.

However, if you over-contribute to your RRSP by more than $2,000, you’ll need to pay 1% tax per month on the amount that exceeds your RRSP deduction limit.

RRSP tax deductions

Each year, the financial institution that holds your RRSP will provide two documents: a statement of the amount you contributed to your account between January 1 and December 31, and a statement of the amount you contributed during the first 60 days of the current year. Depending on your taxable income, you can claim the entire contribution amount or only part of it.

RRSP withdrawals

Once you turn 71, you are federally mandated by law to start withdrawing from your RRSP by December 31 of that year and convert your RRSP to a Registered Retirement Income Fund (RRIF). Once converted, you will start receiving annual predetermined payments, which will mean you will pay less tax on your withdrawals every year than if you received your entire RRSP amount as a lump sum (though that is an option).

As your RRSP is meant to fund your retirement, it is preferable to not withdraw money early as not only will you be taxed on those withdrawals but you will lose the growth potential of that account. However, it may make sense to access funds early under certain circumstances, such as buying your first home as part of the Home Buyer’s Plan (HBP) or for full-time education for you or a spouse or common-law partner as part of the Lifetime Learning Plan (LLP).

An RRSP can technically hold different types of assets as long as they fall under the designation of qualified investment, such as:

• Cash
• Guaranteed Income Certificates (GICs)
• Most exchange-traded securities on a designated stock exchange, including shares, warrants and options, exchange-traded funds (ETFs) and real estate investment trusts (REITs)
• Mutual funds and segregated funds (that are RRSP eligible)
• Canada Savings Bonds and provincial savings bonds
• Investment-grade bonds (corporate and government)
• Mortgage-backed securities (with conditions)
• Insured mortgages
• Gold and silver bullion, coins, bars and certificates

Digital assets, such as cryptocurrency, are not qualified investments. However, you can hold crypto-backed ETFs and mutual funds in your RRSP.

With a self-directed RRSP, you likely have a wider range of investment types available to you than a bank-managed RRSP, for example, that may limit the asset classes within that account.

Each year, your contribution room will be whichever of these two amounts is less: the equivalent of 18% of your earned income as reported on your previous year’s tax return, or the annual limit of to a maximum of $30,780 for tax year 2023 and $31,650 for tax year 2024.

Plus, any unused contribution room from previous years and minus any pension adjustments if you have a pension. If you don’t contribute the max in a given year, that amount is carried forward indefinitely.

RRSP and Taxes

You can contribute to an RRSP tax-free up to the annual limit, but as soon as you withdraw from your RRSP, you will pay tax on the withdrawl. If you withdraw an amount before you retire, you will also pay a withholding tax on the amount. You won’t pay tax if you are using your withdrawal for a HBP or a LLP and you pay back your withdrawal to your RRSP within the allowed period of time.

RRSP Withdrawals

RRSP withdrawals are taxed as income. Plus, you’ll pay a withholding tax if you withdraw early. You don’t pay tax under the HBP or LLP as long as you recontribute the amount within 10 years for the LLP and 15 years for the HBP.

RRSP Advantages vs Disadvantages

The main advantage of an RRSP is the tax deduction that reduces your taxable income. In addition, when you withdraw money from your RRSP at retirement, you will likely be in a lower tax bracket, so you will pay less income tax.

The disadvantage of an RRSP as a savings tool compared to a TFSA, for example, is loss of flexibility. That’s because if you take money out before retirement (called a deregistration), you will typically pay a fee, withholding tax, and also claim that amount as income. The current rate of RRSP withholding tax is 10% for withdrawals up to $4,000, $20% for withdrawals between $5,000 and $15,000, and 30% for withdrawals over $15,000. In contrast, you can take money out of a TFSA tax-free. (However, unlike an RRSP, TFSA contributions are not tax deductible.)

If you’ve been working for a few years and you haven’t contributed your maximum every year, you have “contribution room” to spare. Let’s say you have $20,000 in room in your plan. You’ve put in $15,000 in your RRSP for the year and your annual income is $100,000.

Your 2022 contribution limit would be: ($100,000 x 0.18)+($20,000-$15,000) = $23,000, which is less than $29,210.

If you’ve put in $23,000, the CRA will treat you as if your annual income is lower than $100,000.

Thankfully, you don’t have to do math to figure out your contribution room. You will get a notice of assessment which will let you know or you can create an individual account on the CRA website and discover your annual limit for yourself.

With a spousal RRSP, the lower-income-earning partner owns the plan, so they’re the only ones who can make investment decisions and withdraw—the other partner contributes to it and that’s it.

Like an individual plan, a spousal RRSP can automatically convert to a RRIF at the end of the year the owning spouse turns 71 or they can convert early after age 65. They can also withdraw from the plan using the RRIF or receive all the money as a lump sum, but either way they will pay taxes on any withdrawals based on their income bracket, just like an individual plan.

Opening two spousal RRSPs (one for each partner) allows couples to split their income after they retire. The contributing spouse gets a tax deduction and the owning spouse will be taxed at a lower marginal tax rate on withdrawal, which lowers the couple’s joint tax bill.

Besides individual and spousal RRSP, there are other types of RRSPs you may want to look into depending on your options and preferences:

Self-Directed RRSP

A plan where you control what your RRSP is invested in while your financial institution assists with the administration, including getting the plan registered, receiving your contributions and trading securities.

Group RRSP

An employer-sponsored plan where employees can make small contributions to their RRSPs through payroll deductions. Often, an employer may match their employees’ contributions. Both contributions from your employer and yourself as the employee, give you a tax deduction as the plan holder while your investment still grows on a tax-sheltered basis.