RRSP Guide: How a Registered Retirement Savings Plan Works
An RRSP, or registered retirement savings plan, lets you deduct what you contribute, up to 18% of last year’s earned income with a 2026 maximum of $33,810, and lets your investments grow without yearly tax until you take money out. Withdrawals are then taxed as income, ideally in retirement when your tax rate is lower. Contributions for the 2026 tax year are due by March 1, 2027. This guide covers room, deductions, withdrawals and withholding tax, the spousal RRSP, the Home Buyers’ Plan, what happens at 71 and how US stocks are treated, with every figure checked on October 22, 2026.
Written by Sharad Gondaliya, CPA CPAChartered Professional Accountant, CPA Ontario No. 61040184
Financial reviewer: Neha Gupta, CFA CFA charterholderReview of this page scheduledAt a glance
What an RRSP is. A registered retirement savings plan is an account registered with the Canada Revenue Agency (CRA). Contributions are deducted from your income, growth inside is not taxed each year, and every withdrawal is taxed as income in the year you take it.
How much you can put in for 2026. Your 2026 deduction limit is the lesser of 18% of your 2025 earned income and $33,810, minus any pension adjustment, plus unused room carried forward. CRA has already published the 2027 dollar limit: $35,390.
The RRSP deadline for 2026. Contributions for the 2026 tax year are due by March 1, 2027 (the 60th day of 2027). The 2025 tax-year deadline was March 2, 2026.
Tax on the way out. On a lump-sum withdrawal outside Quebec, the issuer withholds 10% up to $5,000, 20% over $5,000 up to $15,000 and 30% over $15,000. The full amount is added to your income, and the contribution room is not restored.
Home and school withdrawals. The Home Buyers’ Plan lets each first-time buyer take up to $60,000 tax-free and repay it over 15 years. The Lifelong Learning Plan allows $10,000 a year, up to $20,000, for full-time education.
Age limit. December 31 of the year you turn 71 is the last day to contribute to your own RRSP. By then you must convert it to a registered retirement income fund (RRIF), buy an annuity or withdraw the money.
Use the calculator below to work out your 2026 RRSP deduction limit from your 2025 earned income, any pension adjustment and the unused room you carried forward.
1. What an RRSP Is and Who Can Open One
The basic deal. A registered retirement savings plan is an account registered with CRA under the Income Tax Act. What you contribute is deducted from your income, which lowers your tax for the year you claim it. Interest, dividends and capital gains earned inside the plan are not taxed while they stay there. Every dollar you later take out is added to your income for that year and taxed at your rate at that time. An RRSP defers tax; it does not cancel it. The payoff comes from claiming the deduction when your rate is high and paying the tax when your rate is lower, with years of untaxed growth in between.
Who can contribute. You need RRSP deduction room, which builds from earned income reported on a filed tax return, and a social insurance number. The tax rules set no minimum age, although some issuers will not open a plan for a minor. The upper age limit is firm: December 31 of the year you turn 71 is the last day you can contribute to your own RRSP. Please file a return every year, even in a low-income year, because CRA can only record your earned income and build your room from a filed return.
Who offers RRSPs. Banks, credit unions, trust companies, insurers, mutual fund dealers, robo-advisors and online brokers all issue RRSPs. A deposit RRSP at a bank holds savings deposits and GICs. A self-directed RRSP at a broker can hold stocks, ETFs, bonds and funds that you choose. A managed RRSP at a robo-advisor holds a portfolio picked for you. You can hold several RRSPs at different places; your deduction limit applies to all of them combined.
Individual, spousal and group plans. An individual RRSP is in your name, and you deduct what you put in. A spousal RRSP is in your spouse’s or common-law partner’s name, but you contribute and you claim the deduction. A group RRSP is an individual RRSP opened through your employer, usually funded by payroll deductions and often with an employer match. All three draw on the room of the person who claims the deduction, so they must be tracked together.
Related plans you may hear about. A locked-in retirement account (LIRA) holds pension money moved out of an employer plan and follows pension law on withdrawals. A registered retirement income fund is the account most RRSPs turn into by the end of the year the owner turns 71. Neither accepts regular new contributions. A pooled registered pension plan (PRPP) shares the same deduction limit as your RRSP, so contributions to both count against one number. For a map of every registered account, see our guide to investment accounts in Canada.
2. RRSP Contribution Limits and Deduction Room
The formula. CRA calculates your RRSP deduction limit for 2026 as the lesser of 18% of your 2025 earned income and the 2026 dollar limit of $33,810. It then subtracts your pension adjustment (PA) and any past service pension adjustment (PSPA), and adds any pension adjustment reversal (PAR) plus unused room carried forward from earlier years. The result is the most you can deduct for 2026.
What earned income means. For RRSP purposes, earned income mainly covers employment income, net self-employment income, net rental income and taxable spousal or child support you receive. Investment income, pension income, RRSP and RRIF withdrawals and dividends from your own corporation do not count. An incorporated owner paid only in dividends therefore builds no RRSP room, while salary from the same company does build it.
| Tax year | RRSP dollar limit | Earned income in the prior year that reaches the limit (limit / 18%) |
|---|---|---|
| 2020 | $27,230 | $151,277.78 |
| 2021 | $27,830 | $154,611.11 |
| 2022 | $29,210 | $162,277.78 |
| 2023 | $30,780 | $171,000.00 |
| 2024 | $31,560 | $175,333.33 |
| 2025 | $32,490 | $180,500.00 |
| 2026 | $33,810 | $187,833.33 |
| 2027 | $35,390 | $196,611.11 |
The 2027 limit is already set. CRA has published the 2027 RRSP dollar limit of $35,390, which equals the 2026 money purchase limit for pension plans. It is $1,580 more than the 2026 limit ($35,390 – $33,810). To reach it, you need $196,611.11 of earned income in 2026.
Your number is usually lower than the headline. Most people’s new room is set by the 18% rule, not by the dollar limit. Someone who earned $60,000 in 2025 and belongs to no pension plan gets $10,800 of new room for 2026 ($60,000 x 18%). A member of a workplace pension plan gets less, because the PA comes off. Your exact limit, including room carried forward, is printed on the RRSP deduction limit statement in your latest notice of assessment. Our page on the RRSP contribution limit covers the 18% rule, PA, PSPA and PAR in full, with examples.
3. How RRSP Room Carries Forward, and the RRSP Deadline 2026
Unused room does not expire. If you do not use all of your limit in a year, the rest is carried forward and added to the next year’s limit. There is no time limit, other than the age 71 cut-off. A person who earned income for years but never contributed can have a very large limit, which is useful in a year of unusually high income, such as a bonus year or the sale of a rental property.
Contributing and deducting are separate choices. You can contribute in one year and claim the deduction in a later year. Contributions you have made but not deducted are shown as unused contributions on your notice of assessment. This lets you save now and keep the deduction for a year when your income, and so your marginal tax rate, is higher. For example, a parent on leave in 2026 can contribute $8,000 that year and deduct it in 2027, after returning to a higher salary.
The RRSP deadline for 2026: March 1, 2027
The 60-day rule. The RRSP contribution year runs from the 61st day of one year to the 60th day of the next. For the 2026 tax year the deadline is March 1, 2027 (the 60th day of 2027). When the 60th day falls on a weekend, the deadline moves to the next business day, which is why the 2025 tax-year deadline was March 2, 2026.
What counts for 2026. Any contribution made from January 1, 2026 to March 1, 2027 can be deducted on your 2026 return, as long as it was not already deducted on your 2025 return. Contributions made in the first 60 days of 2027 must still be listed on Schedule 7 of your 2026 return, even if you plan to deduct them in 2027 or later. Your issuer sends a separate receipt for contributions made in the first 60 days of the year.
The countdown below shows the days left until the deadline for 2026 contributions.
Please leave a margin. Your contribution must reach the plan by the deadline, not just leave your bank account. Transfers between institutions and cheques take days. The safest approach is to contribute through the year by pre-authorized deposits, so the deadline only matters for a top-up.
4. RRSP Tax Treatment: In, During and Out
Going in: the deduction. Your RRSP deduction is claimed on line 20800 of your return. It comes off your income before tax is calculated, so it saves tax at the marginal rates that apply to the dollars it removes. The table shows what a $10,000 deduction saves for a person with $90,000 of income in four provinces, using 2026 brackets and basic personal amounts.
| Province | Tax saved | Saving as a share of the deduction |
|---|---|---|
| Ontario | $2,965.00 | 29.65% |
| British Columbia | $2,820.00 | 28.20% |
| Alberta | $3,050.00 | 30.50% |
| Quebec | $3,611.75 | 36.12% |
How we computed it. Each figure is the tax on $90,000 minus the tax on $80,000. Tax is the 2026 federal brackets less the federal basic personal amount credit at 14%, plus the provincial brackets less the provincial basic personal amount credit at the lowest provincial rate. Ontario adds its surtax and the Ontario Health Premium; Quebec residents’ federal tax is reduced by the 16.5% Quebec abatement. Other credits, such as CPP and EI credits, are left out, so your own figure may differ slightly.
During: tax-deferred growth. Inside the plan, interest, dividends and capital gains are not taxed, and you can buy and sell without reporting anything. The trade-off is that the dividend tax credit and the lower tax on capital gains do not follow the money out. Every withdrawal is taxed as ordinary income, whatever earned it. Capital losses inside an RRSP cannot be claimed on your return.
Coming out: taxed as income. Withdrawals are reported on a T4RSP slip and added to your income for the year. That is why the best withdrawal years are low-income years: retirement before pensions start, a sabbatical, or a year between jobs. A withdrawal can also reduce income-tested benefits, which our TFSA vs RRSP comparison covers.
The calculator below shows the tax an RRSP deduction saves at your income in any province, using the same 2026 brackets.
5. RRSP Withdrawals and Withholding Tax
Withholding rates. When you take a lump sum out of an RRSP, the issuer must withhold tax and send it to CRA. The rate depends on the size of the withdrawal and where you live.
| Amount withdrawn | Outside Quebec | Quebec residents (federal part) | Withheld on the example amount outside Quebec |
|---|---|---|---|
| $5,000 or less | 10% | 5% | $500 on $5,000 |
| Over $5,000, up to $15,000 | 20% | 10% | $2,000 on $10,000 |
| Over $15,000 | 30% | 15% | $6,000 on $20,000 |
Quebec. Quebec residents have the lower federal rates shown above, and Quebec provincial income tax is also withheld on top of the federal part. The combined amount is set by both governments’ rules.
Withholding is a prepayment, not the final tax. The whole withdrawal is added to your income, and the real tax is settled when you file. This example is hypothetical: an Ontario resident with $60,000 of other income withdraws $10,000. The issuer withholds $2,000 ($10,000 x 20%). The withdrawal raises her 2026 tax by $2,965 (tax on $70,000 minus tax on $60,000), so she owes another $965 in April ($2,965 – $2,000). Please set that amount aside when you withdraw.
Splitting a withdrawal does not cut the tax. Taking $5,000 at a time lowers the amount withheld up front, but the full total is still added to your income, so the tax owed at filing is the same.
The room is gone for good. Unlike a TFSA, an RRSP does not give back room when you withdraw. A $10,000 withdrawal at 40 is $10,000 of tax-deferred space you never get back. The only exceptions are the Home Buyers’ Plan and the Lifelong Learning Plan, where you repay the money instead.
Issuer fees and non-residents. Some issuers charge a fee per withdrawal. As of October 22, 2026, moomoo charges CA$50 per RRSP withdrawal and BMO InvestorLine lists $0 for RRSP deregistration. If you live outside Canada when you withdraw, the withholding rate is 25%, unless a tax treaty reduces it.
The calculator below estimates the withholding on a withdrawal and the final tax once it is added to your income.
6. RRSP Over-Contributions and the $2,000 Buffer
The buffer. CRA allows you to be over your deduction limit by up to $2,000 without a penalty tax, as long as you were 18 or older at any time in the previous year. The $2,000 is not deductible while it sits there; it simply is not taxed. It becomes deductible later, once new room covers it.
The penalty above the buffer. Anything above your limit plus $2,000 is taxed at 1% a month for every month it stays in the plan. You report it on Form T1-OVP, which is due within 90 days after the end of the calendar year. Late filing adds interest and penalties to the tax itself.
A worked figure. This example is hypothetical. Your 2026 limit is $15,000 and you contribute $19,000 in June. You are $4,000 over your limit ($19,000 – $15,000). The first $2,000 is covered by the buffer, so $2,000 is taxable excess. The tax is $20 a month ($2,000 x 1%). If you leave it from June to December, that is seven months and $140 ($20 x 7).
How to fix it. Withdraw the excess as soon as you spot it, or let the new room on January 1 absorb it if that ends the excess. A withdrawal is normally taxable income, but if you did not deduct the excess you can usually claim an offsetting deduction in the same year. If the excess came from an honest mistake and you acted quickly, you can ask CRA to cancel the tax on Form RC2503.
Where over-contributions usually come from. The most common causes are payroll contributions to a group RRSP that keep running after you have hit your limit, contributions made after your notice of assessment without subtracting them, and a misread notice that shows last year’s limit. Please check your limit against everything you have contributed since your last return was filed. Our page on the RRSP deduction limit shows how to reconcile the numbers.
7. Spousal RRSP and the Attribution Rule
How a spousal RRSP works. You contribute to a plan in the name of your spouse or common-law partner, using your own deduction room, and you claim the deduction. Your spouse owns the plan and is taxed on withdrawals. The goal is to move future retirement income to the lower-income partner, so the couple pays less tax in total. Your spouse’s own room is not affected.
The attribution rule. If your spouse withdraws from a spousal RRSP in a year when you contributed to any spousal plan for them, or in either of the two years before, the withdrawal is generally taxed in your hands, not theirs. The contributor reports it using Form T2205. This stops couples from contributing at a high rate and withdrawing right away at a low rate.
Counting the years. This example is hypothetical. Your last spousal contribution is made in 2026. A withdrawal in 2026, 2027 or 2028 is attributed to you. A withdrawal in 2029 or later is taxed to your spouse. Because the rule counts calendar years, a contribution made in December 2026 starts the clock a full year earlier than one made in January 2027, even if both are deducted on the same return.
After you turn 71. You cannot contribute to your own RRSP after December 31 of the year you turn 71, but you can keep contributing to a spousal RRSP until the end of the year your spouse turns 71, as long as you still have deduction room from earned income.
Is it still worth it with pension splitting? From 65, up to 50% of eligible pension income, including RRIF payments, can be split with a spouse on a joint Form T1032. That covers much of what spousal RRSPs used to do. A spousal plan still helps when you want to shift more than half the income, when you plan to draw retirement income before 65, or when you want to keep each spouse’s income under a benefit threshold, such as the OAS recovery threshold of $95,323 for 2026 income.
8. Home Buyers’ Plan and Lifelong Learning Plan
The Home Buyers’ Plan limit. The Home Buyers’ Plan (HBP) lets a first-time buyer withdraw up to $60,000 from RRSPs without tax to buy or build a qualifying home. The limit rose from $35,000 to $60,000 for withdrawals made after April 16, 2024. Each eligible person in a couple has a separate $60,000 limit.
Who qualifies. You count as a first-time buyer if you did not live in a home owned by you or your spouse or partner in the current year (ignoring the 30 days before the withdrawal) or in the previous four calendar years. You need a written agreement to buy or build the home, must intend to live in it within one year, and must be resident in Canada when you withdraw. The home must be bought or built before October 1 of the year after your first withdrawal.
Repayment. You repay over up to 15 years, with a minimum each year of your balance divided by the years left. Normally repayment starts in the second year after the first withdrawal. For first withdrawals made from January 1, 2022 to December 31, 2028, it starts in the fifth year instead, so a 2026 withdrawal is first repaid in 2031. A $60,000 HBP balance needs at least $4,000 a year ($60,000 / 15). Any shortfall is added to your income for that year.
| Feature | Home Buyers’ Plan | Lifelong Learning Plan |
|---|---|---|
| Purpose | Buy or build a qualifying first home | Full-time education for you or your spouse or partner |
| Withdrawal limit | $60,000 per person | $10,000 a year, $20,000 per participation |
| Form | T1036, one per withdrawal | RC96 |
| Repayment period | 15 years | 10 years |
| Minimum yearly repayment | 1/15 of the balance to start | 1/10 of the balance to start |
| Missed repayment | Added to income | Added to income |
The 89-day rule. Money contributed to an RRSP in the 89 days before an HBP withdrawal may not be deductible. If you plan to use the HBP, please make the contribution at least 90 days before you withdraw.
Lifelong Learning Plan. The LLP lets you withdraw up to $10,000 a year and $20,000 in total each time you participate, to pay for full-time study by you or your spouse or partner at a designated institution. Repayment runs over 10 years, at least one tenth a year, and starts no later than the fifth year after the first withdrawal. The HBP, unlike the LLP, can be paired with a First Home Savings Account for the same home: see our Home Buyers’ Plan guide, the FHSA guide and FHSA vs RRSP Home Buyers’ Plan.
9. What You Can Hold in an RRSP, Including US Stocks
Qualified investments. An RRSP can hold cash and deposits, GICs, most securities listed on a designated stock exchange (shares, ETFs, REITs and listed options), mutual and segregated funds, government bonds and savings bonds, investment-grade corporate debt and insured mortgages. The list is generally the same as for a TFSA.
Investments that trigger a penalty. Holding a non-qualified investment, or a prohibited investment such as shares of a company you control or have a significant interest in, triggers a special tax on the plan holder. Private company shares, raw land and personal-use property are where most problems start. If you are unsure, please ask the issuer before you buy.
US dividends and the treaty exemption. The US normally withholds 15% on dividends paid to Canadian residents who have filed Form W-8BEN with their broker, and 30% without it. RRSPs and RRIFs are exempt from that US withholding under Article XXI of the Canada-US tax treaty when US-listed securities are held directly in the plan. TFSAs are not exempt. This example is hypothetical: $1,000 of US dividends paid into a TFSA loses $150 to US tax ($1,000 x 15%), and that tax cannot be recovered. The same dividends paid into an RRSP lose $0.
The fund-layer catch. The exemption only reaches US-listed securities you hold directly. A Canadian-listed ETF or mutual fund that owns US shares has the US tax withheld inside the fund, and an RRSP cannot get that back. Our page on US stocks in a TFSA explains the same issue from the TFSA side.
US investing and USD accounts. Several brokers let an RRSP hold US dollars. As of October 22, 2026, Questrade, National Bank Direct Brokerage and Desjardins Online Brokerage list no fee for US dollars in an RRSP, Qtrade charges US$15 a quarter per account ($0 with Investor Plus), and Wealthsimple charges $10 a month plus tax for a USD account on its Core tier, included on Premium and Generation. Online US stock trades cost $0 at Questrade, Wealthsimple, Webull, Qtrade, National Bank, BMO InvestorLine and Desjardins. Use the investment fee calculator to add up commissions and account fees, and compare the best RRSP accounts for US stocks, where Desjardins Online Brokerage and Questrade lead at 4.6 / 5 on our US-stocks score.
Protection. Deposits and GICs in an RRSP at a CDIC member are insured up to $100,000, as a separate category from your other deposits. At an investment dealer that is a CIPF member, retirement accounts (RRSP, RRIF and LIF) are covered up to $1,000,000 combined if the firm fails. Neither covers a fall in market prices. Our CIPF vs CDIC guide explains how the two protections differ.
10. Turning 71: RRIF, Annuity or Cash
The deadline. Your own RRSP must end by December 31 of the year you turn 71. Before then you choose one option or a mix: transfer it to a RRIF, use it to buy an annuity, or withdraw it as cash. A direct transfer to a RRIF has no tax withheld. Cashing out the whole plan adds its full value to one year’s income, which for most people means the top tax rate on much of it. If you give no instructions, the plan terms decide what happens, so please confirm your choice with the issuer well before December.
RRIF minimum withdrawals. A RRIF does not take contributions. Each year, starting the year after the RRIF is set up, you must withdraw at least a minimum: the plan’s value on January 1 multiplied by a factor for your age at the start of the year. The factor is 1 divided by (90 minus your age) up to age 70, then 5.28% at 71, 5.40% at 72 and rising each year after. This example is hypothetical: a $300,000 RRIF for someone aged 71 on January 1 has a minimum of $15,840 that year ($300,000 x 5.28%).
Using a younger spouse’s age. When you set up the RRIF you can elect to base the minimum on your spouse’s or common-law partner’s age. A younger spouse gives a lower factor and a smaller forced withdrawal, which leaves more money growing tax-deferred.
Withholding on RRIF payments. No tax is withheld on the minimum amount. Anything you take above the minimum is withheld at the lump-sum rates: 10%, 20% or 30% outside Quebec, and 5%, 10% or 15% for the federal part in Quebec. Because nothing is withheld on the minimum, many retirees owe tax at filing time unless they ask the issuer to withhold more.
Tax breaks on RRIF income. From 65, RRIF payments qualify for the federal pension income amount of up to $2,000 and for pension income splitting of up to 50% with a spouse. Some people convert part of an RRSP to a RRIF at 65 for these reasons alone, years before they must. The RRIF minimum withdrawal table lists every factor, the RRIF calculator projects your withdrawals, and our ranking of the best RRIF accounts compares where to hold one.
A last contribution at 71. If you have earned income in the year you turn 71, it creates RRSP room for the following year, when you can no longer contribute to your own plan. Some people make that contribution in December before the plan closes and accept the 1% tax for one month on the part above the $2,000 buffer, then deduct it the next year. If you have a younger spouse, a spousal RRSP contribution avoids the issue entirely.
11. Death, Separation, Newcomers and Leaving Canada
When an RRSP owner dies. As a general rule, the plan’s full value at death is included in income on the deceased person’s final return, which can mean a large tax bill. The main exception is a rollover: if the RRSP passes to a surviving spouse or common-law partner, it can move into their RRSP or RRIF with tax deferred. A financially dependent child or grandchild can also receive the money with tax deferred in some cases, for example through an annuity that runs to age 18, or a rollover where the child depended on the deceased because of a physical or mental infirmity. Naming the right beneficiary on the plan, and keeping it current, matters more than almost any investment choice. In Quebec, beneficiary designations work differently for most RRSPs that are not insurance contracts, so the will usually governs.
Separation and divorce. RRSP money can be divided between former spouses or partners without tax through a direct transfer, as long as it follows a court order or written separation agreement and the couple lives apart. The transfer is made on Form T2220. Cashing out and handing over the money instead creates tax for the plan owner.
Newcomers to Canada. RRSP room for a year is based on earned income from the previous year, so most people who arrive in 2026 have no RRSP room until 2027, based on the Canadian earned income they report on a 2026 return. Earned income before you became resident does not count. A TFSA is often the first registered account a newcomer can use, because its room starts the day you become resident.
Leaving Canada. You can keep your RRSP after you emigrate, and it is not cashed out when you leave. Withdrawals made while you are a non-resident have 25% withheld, unless a tax treaty reduces it. You can only contribute while non-resident if you still have room from Canadian earned income, and the deduction is worth little if you have no Canadian income to deduct it from.
Income-tested benefits. RRSP withdrawals count as income for income-tested benefits such as the Guaranteed Income Supplement and the Canada Child Benefit. If you receive or expect such benefits, plan withdrawals carefully, and consider whether a TFSA suits part of your savings better. Our CPP and OAS payment dates page lists the 2026 amounts.
12. RRSP vs TFSA vs FHSA
Three accounts, three jobs. The RRSP is built for retirement and works best when your tax rate now is higher than it will be when you withdraw. The TFSA is the flexible all-purpose account, with no deduction going in and no tax coming out. The FHSA combines both breaks for one goal: a first home.
| Feature | RRSP | TFSA | FHSA |
|---|---|---|---|
| Contributions deductible | Yes | No | Yes |
| Withdrawals taxed | Yes, as income | No | No, if a qualifying home withdrawal |
| New room for 2026 | 18% of 2025 earned income, up to $33,810 | $7,000 | $8,000 a year |
| Lifetime cap | None beyond yearly room | None beyond yearly room | $40,000 |
| Room back after a withdrawal | No, except HBP and LLP repayments | Yes, on January 1 of the next year | No |
| Contribution deadline | 60th day of the next year | Room is per calendar year | December 31 |
| Age limit | Contribute until December 31 of the year you turn 71 | Open at 18 or 19; no upper age | Open at 71 or younger |
| Over-contribution tax | 1% a month above a $2,000 buffer | 1% a month, no buffer | 1% a month |
| US dividends on US-listed shares held directly | Exempt from US withholding | 15% withheld | 15% withheld |
| Effect of withdrawals on income-tested benefits | Counted as income | Not counted | Qualifying withdrawals not counted |
A rule of thumb. If your marginal rate today is clearly higher than the rate you expect when you withdraw, the RRSP usually comes out ahead. If the rates are similar, or you may need the money before retirement, the TFSA is usually simpler and more flexible. If you are a first-time buyer, the FHSA is hard to beat for home savings because it gives both a deduction and a tax-free withdrawal.
Read more. Our TFSA vs RRSP page works through the tax at four incomes, the TFSA guide covers the TFSA rules, and FHSA vs TFSA for a down payment compares the two home-savings options.
13. Where to Open an RRSP
Pick the type first. A deposit RRSP at a bank or credit union suits people who want GICs and savings, and is covered by deposit insurance. A robo-advisor runs a portfolio for a yearly fee and suits hands-off savers; compare them on our list of the best robo-advisors in Canada. A self-directed RRSP at an online broker gives the lowest ongoing costs if you are comfortable choosing your own ETFs or stocks.
Costs that matter for an RRSP. Commissions get the attention, but for a long-term RRSP the account fee, the cost of holding US dollars, the withdrawal fee and the fee to transfer out matter as much. The table lists these for selected brokers in alphabetical order. It is not a ranking. Our ranked list of the best RRSP accounts in Canada orders providers by their published score under our broker rating methodology.
| Broker | Account or admin fee | Holding USD in an RRSP | Transfer-out fee |
|---|---|---|---|
| Desjardins Online Brokerage (Disnat) | $100 a year on an RRSP under $15,000 | US plans available; no fee stated | $150 for a total transfer; $25 per security for a partial |
| moomoo | $0; CA$50 per RRSP withdrawal | Holds CAD and USD; no fee stated | $75 full or $50 partial, per currency |
| National Bank Direct Brokerage | $100 a year per account root, waived at $20,000 or more | Available; no separate fee listed | $150 |
| Qtrade Direct Investing | No quarterly admin fee | US$15 a quarter; $0 with Investor Plus | $150 |
| Questrade | $0 | Available; no separate fee listed | $150 |
| RBC Direct Investing | $0 maintenance fee | Holds CAD and USD; cost not stated | $150 |
| Scotia iTRADE | $100 a year if assets are under $25,000 and you make fewer than 12 trades | USD RRSP available; no fee listed | $150 |
| TD Direct Investing | $25 a quarter if household assets are under $15,000, with waivers | Not stated | $150 |
| Wealthsimple | $0 | $10 a month plus tax on Core; $0 on Premium and Generation | $0 |
| Webull | $0.70 a month per account | Not stated | $150 full or $50 partial |
Read the reviews. Full costs, account types and safety details are in our reviews of Wealthsimple, Questrade, Qtrade, TD Direct Investing, RBC Direct Investing and moomoo.
Moving an RRSP. Never withdraw and redeposit to switch providers: the withdrawal is taxable and the room is lost. Ask the new institution to request a direct transfer on Form T2033, which moves the plan with no tax and no effect on your room. Some brokers cover the old provider’s transfer-out fee; our guide on how to transfer an RRSP or investment account explains the steps.
14. Common RRSP Mistakes and How to Avoid Them
Treating the refund as spending money. The refund is mostly tax you will pay back on withdrawal. Spending it means you saved only the after-tax part. Putting the refund into a TFSA or back into the RRSP keeps the full benefit working.
Contributing in a low-income year and deducting at once. A deduction at a 20% rate that is later withdrawn at 30% loses money. If your income is low this year, contribute if you like, but hold the deduction for a higher-income year.
Moving a losing stock into the RRSP. Contributing securities in kind counts as selling them at market value. A gain is taxable, but a loss on that transfer is denied. Sell the losing position in your non-registered account first, claim the loss, then contribute the cash.
Borrowing without a repayment plan. Interest on money borrowed to contribute to an RRSP is not deductible. An RRSP loan only makes sense if you can repay it quickly, ideally with the refund.
Forgetting the HBP repayment. A missed minimum is added to your income at your full marginal rate. Set a yearly reminder or an automatic contribution, and mark it as an HBP repayment on Schedule 7.
Ignoring the beneficiary form. An RRSP that pays to your estate instead of a spouse can lose the rollover and may attract probate costs in some provinces. Check the designation after every marriage, separation or birth.
Find out what your next RRSP contribution would save at your income and in your province.
What You Need to Open an RRSP and What You Get
What you need to open an RRSP
- A social insurance number
- Earned income reported on filed tax returns, which creates your room
- Your RRSP deduction limit from your latest notice of assessment
- A list of contributions made since that return was filed
- Government photo ID for the issuer’s identity check
- A bank account to fund the plan, ideally by pre-authorized deposit
- Your spouse’s or partner’s details for a spousal RRSP
- Beneficiary names and dates of birth
- A plan for what you will hold: deposits, GICs, funds or ETFs
What you get from an RRSP
- A deduction at your marginal tax rate for every dollar you claim
- Tax-deferred growth on interest, dividends and gains
- Unused room that carries forward with no expiry before 71
- Exemption from US withholding on directly held US-listed dividends
- Up to $60,000 for a first home through the Home Buyers’ Plan
- Up to $20,000 for full-time study through the Lifelong Learning Plan
- Income splitting through a spousal RRSP
- A tax-deferred rollover to a surviving spouse or partner
- A path to a RRIF, the pension income amount and pension splitting from 65
How an RRSP Works, Step by Step
- Find your room. Read the RRSP deduction limit statement on your latest notice of assessment and subtract anything contributed since that return was filed.
- Choose the type of plan. Decide between a deposit RRSP, a robo-advisor and a self-directed account, and between an individual and a spousal plan.
- Open and fund it. Open the account, name a beneficiary, and set up regular contributions so you are not racing the deadline.
- Invest the money. Cash sitting in an RRSP earns little. Choose investments that match when you will need the money.
- Claim the deduction. Report every contribution on Schedule 7 and claim what you choose on line 20800, now or in a later year.
- Use the refund well. Put the tax saving into your TFSA, your RRSP or a debt with a high interest rate.
- Plan the exit. Withdraw in low-income years, and convert to a RRIF or annuity by December 31 of the year you turn 71.
10 RRSP Strategies That Save You Tax
1. Contribute every month
Regular pre-authorized contributions remove the deadline scramble, keep the money invested longer and make it easier to stay under your limit. A $1,000 monthly plan adds $12,000 a year without a single deadline-day decision, and it pairs well with a payroll withholding change.
2. Reinvest the refund
The refund is the government’s share of your contribution, and you will pay it back on withdrawal. Putting it into a TFSA or back into the RRSP is what makes the whole RRSP deal work. Spending it shrinks the benefit to the after-tax amount you put in.
3. Save the deduction for a higher-income year
You can contribute now and deduct later. If you expect a raise, a bonus or a return to full-time work, holding the deduction until then can raise its value. In Ontario, a $5,000 deduction saves $1,102.50 at $50,000 of income but $1,632.50 at $75,000.
4. Get the refund during the year
If you contribute regularly, you can ask CRA to let your employer withhold less tax from each pay on Form T1213. You then get the tax saving through the year instead of as a lump sum in spring.
5. Balance income with a spousal RRSP
Contributing to a plan for the lower-income spouse can even out retirement income, keep both incomes under benefit thresholds and allow withdrawals before 65, when pension splitting is not yet available for RRIF income.
6. Put US dividend payers in the RRSP
Because RRSPs are exempt from US withholding on directly held US-listed securities, a household that holds US-listed dividend-paying securities generally does better holding them in the RRSP rather than the TFSA, where 15% is lost for good.
7. Draw down in low-income years
Years between retirement and the start of CPP, OAS or a pension often have the lowest tax rates of your life. Planned RRSP or RRIF withdrawals then can shrink the forced minimums later and the tax on your estate.
8. Pair the HBP with an FHSA
A first-time buyer can use the Home Buyers’ Plan and an FHSA for the same home. Together they can fund a much larger down payment from pre-tax dollars than either one alone.
9. Transfer, never withdraw, to switch providers
A direct transfer on Form T2033 keeps the money registered. A withdrawal and redeposit triggers tax and wastes room that never comes back.
10. Time spousal contributions for December
Spousal attribution counts calendar years, so a December contribution starts the three-year clock a year before a January contribution. If your spouse may need to withdraw, the timing can decide who pays the tax.
Illustrative Example: One RRSP Contribution From Room to Refund
This example is hypothetical. Maya lives in Ontario, has no workplace pension, earned $90,000 in 2025 and expects $92,000 of employment income in 2026.
- Her room. Her notice of assessment shows a 2026 RRSP deduction limit of $20,200: new room of $16,200 ($90,000 x 18%) plus $4,000 of unused room carried forward ($16,200 + $4,000 = $20,200). The new room is below the $33,810 dollar limit, so the 18% figure applies.
- Her contribution. She contributes $1,000 a month for 12 months ($1,000 x 12 = $12,000), all before the March 1, 2027 deadline.
- The tax saved. Deducting $12,000 on her 2026 return lowers her taxable income from $92,000 to $80,000. Her 2026 tax falls from $19,055.25 to $15,497.25, a saving of $3,558.00 ($19,055.25 – $15,497.25). Every dollar removed sits where the federal rate is 20.5% and the Ontario rate is 9.15%, so the saving is also $12,000 x 29.65% = $3,558.00.
- The refund. Her employer withheld tax as if she had no RRSP, so the $3,558.00 comes back as a refund. She puts it into her TFSA.
- Room carried forward. She has $8,200 of room left ($20,200 – $12,000), which carries forward.
- Next year. Her 2027 limit will be $16,560 of new room ($92,000 x 18%), below the published 2027 dollar limit of $35,390, plus the $8,200 carried forward: $24,760 in total ($16,560 + $8,200).
Tax figures use 2026 federal and Ontario brackets, basic personal amounts, the Ontario surtax and the Ontario Health Premium only, the same method as our RRSP tax refund calculator.
RRSP FAQ
What is an RRSP and how does it work?
An RRSP is a registered retirement savings plan. You deduct contributions from your income, which lowers your tax, and investments grow inside without yearly tax. When you withdraw, the money is added to your income and taxed at your rate at that time. It works best when your tax rate at withdrawal is lower than your rate when you claimed the deduction.
How much can I contribute to my RRSP in 2026?
Your 2026 limit is the lesser of 18% of your 2025 earned income and $33,810, minus any pension adjustment, plus unused room carried forward. The exact figure is on the RRSP deduction limit statement in your latest notice of assessment. Subtract anything you contributed after that return was filed. You can also be over by up to $2,000 without penalty if you were 18 or older last year.
What is the RRSP deadline for the 2026 tax year?
The deadline for 2026 contributions is March 1, 2027, the 60th day of 2027. When the 60th day falls on a weekend, the deadline moves to the next business day. Any contribution made from January 1, 2026 to March 1, 2027 that was not deducted on your 2025 return can be deducted for 2026.
How much tax will I save with an RRSP contribution?
You save tax at the marginal rates on the income the deduction removes. Using 2026 brackets, a $10,000 deduction at $90,000 of income saves $2,965.00 in Ontario, $2,820.00 in British Columbia, $3,050.00 in Alberta and $3,611.75 in Quebec. Our RRSP calculator works out the figure for your income and province.
How much tax is withheld when I withdraw from my RRSP?
Outside Quebec, the issuer withholds 10% on withdrawals of $5,000 or less, 20% over $5,000 up to $15,000, and 30% over $15,000. In Quebec, the federal part is 5%, 10% and 15%, and Quebec provincial tax is withheld on top. The withdrawal is then added to your income, so you may owe more when you file.
What happens if I over-contribute to my RRSP?
You can be over your deduction limit by up to $2,000 without penalty if you were 18 or older at any time in the previous year. Anything above that is taxed at 1% a month until it is removed or absorbed by new room. You report it on Form T1-OVP within 90 days after year-end, and you can ask CRA to waive the tax on Form RC2503 for an honest mistake.
Can I withdraw from my RRSP to buy a home?
Yes. Under the Home Buyers’ Plan, a first-time buyer can withdraw up to $60,000 without tax to buy or build a qualifying home, and repay it over 15 years. For first withdrawals made from 2022 to 2028, repayment starts in the fifth year after the withdrawal. Missed repayments are added to your income. You can also use an FHSA for the same home.
How does a spousal RRSP work?
You contribute to a plan in your spouse’s or common-law partner’s name, using your own room, and you claim the deduction. Your spouse is taxed on later withdrawals, unless they withdraw in a year you contributed to a spousal plan or in either of the two years before. In that case the withdrawal is taxed to you instead.
What happens to my RRSP when I turn 71?
By December 31 of the year you turn 71 you must convert the RRSP to a RRIF, buy an annuity, withdraw the money, or combine these. A direct transfer to a RRIF has no tax withheld. From the year after the RRIF is set up, you must withdraw a yearly minimum based on your age, or your spouse’s age if you elect it when you set it up.
Do I pay US withholding tax on US dividends in an RRSP?
Not on US-listed securities held directly in the plan. RRSPs and RRIFs are exempt from US withholding under Article XXI of the Canada-US tax treaty, while TFSAs are not. The exemption does not reach US tax withheld inside a Canadian-listed fund that owns US shares, because that tax is paid at the fund level.
What happens to an RRSP when the owner dies?
Generally the plan’s full value is added to the owner’s income on the final return. If it passes to a surviving spouse or common-law partner, it can roll into their RRSP or RRIF with tax deferred. A financially dependent child or grandchild can also receive it with tax deferred in some cases. Keeping the beneficiary designation current helps the money reach the right person.
How does WealthScale check the figures on this page?
Every limit, rate and date on this page was checked against Canada Revenue Agency publications, and every broker fee against the provider’s published pricing, on October 22, 2026. Tax savings are computed from the 2026 federal and provincial brackets. Our editorial standards page explains how we source, compute, date and correct figures, and how we keep reviews separate from any business relationships.
Check your room, then see how an RRSP compares with a TFSA for your income.
Figures on this page were checked against Canada Revenue Agency publications and each provider’s published pricing on October 22, 2026. We update this page when a figure changes.
Meet the Experts Behind WealthScale
Sharad is a CPA Ontario member (No. 61040184) and a Certified Public Accountant licensed in Washington and Montana, with more than 15 years in accounting and tax, a Diploma in Banking and Finance and a Certificate in Small Business Finance. He checks WealthScale content against primary sources. WealthScale is independent of his firm, Gondaliya CPA Professional Corporation, and provides general information only, not personal financial, investment, tax or legal advice.
- Chartered Professional Accountant, CPA Ontario
- Certified Public Accountant, Washington (No. 57629) and Montana (No. PAC-CPAP-LIC-033176)
- Writing on tax and registered accounts since 2021
- Reader’s Choice Award 2025 Winner, Best Accountant (Toronto)
Neha Gupta is a CFA charterholder based in Winnipeg who has worked in financial markets since December 2005. She has published more than 2,600 investment articles and is Head of Operations and Finance at Whiteland Real Estate. She reviews WealthScale’s investing pages for accuracy.
- CFA charter, CFA Institute (awarded 2023)
- Post Graduate Diploma in Business Administration (Finance), 2008
- In financial markets since December 2005
- More than 2,600 published investment articles
General information only. Not financial, investment, tax or legal advice. WealthScale is independent and is published by WealthScale Media Inc., 55 Queen St E, Suite 1205, Toronto, ON M5C 1R6. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.