2 YEAR 1.88%*

3 YEAR 1.79%*

4 YEAR 2.04%

5 YEAR 1.79%*

5 YEAR Variable 1.80%*

Updated October 14th, 2020
*Special conditions apply. Interest rates are provided for information purposes only and are subject to change without notice.

RRSPs explained: A primer for newbies

Globe and Mail ~ February 5th, 2016

With RRSP season in full swing, here’s a primer on Canada’s registered retirement savings plan.

What is an RRSP?

The registered retirement savings plan was introduced in 1965 to help Canadians save for their retirement. According to Larry Moser, a divisional manager for the Bank of Montreal in Ottawa, it is “the greatest vehicle for retirement savings,” and it is one of the few ways to earn an income-tax reduction in your earning years (the amount you contribute is tax deductible). Income tax is paid on RRSP money when it is withdrawn, when you will likely be in a lower-tax bracket.

How do you go about it?

You will need to be at least 18 years old and have a social insurance number. You can open an RRSP at any financial institution, including online. A financial adviser can also get the ball rolling; it’s worth asking friends and family whom they use and whom they’ve been happy with.

What is this year’s deadline?

This year’s deadline to contribute for the 2015 tax year is Feb. 29.

What is the maximum contribution limit?

The limit is 18 per cent of your Canadian income, to a maximum of $24,930. If you belong to a company pension plan, this amount will be less.

Click here to read the full article.