The best RRSP savings accounts in Canada

A Registered Retirement Savings Plan (RRSP) is a government-approved account designed to help Canadians save and invest for retirement and offers significant tax-advantages that can potentially save you several thousands of dollars.

There are two key advantages to opening an RRSP:

• Reduces taxable income: whatever you contribute to your RRSP within a year will reduce your taxable income (for instance, if your annual salary is $75,000 but you contributed $5,000 to your RRSP, the Canadian Revenue Agency (CRA) will tax your income as if it were $70,000). This will result in a bigger refund come tax season.
• Tax deferment: you’ll eventually owe taxes on your RRSP but only at the time you make a withdrawal. The idea being you’ll withdraw your money at retirement when you’re at a significantly lower tax bracket - maximizing your retirement savings.
  • It's worth highlighting you can withdraw RRSPs early with no penalties in certain circumstances, like if you're a first-time homebuyer (Home Buyers' Plan) or want to advance your professional education (Lifelong Learning Plan).

Any Canadian resident (who has a Social Insurance Number) can open an RRSP the moment they start earning taxable income up until they turn 71 years old.

Like the Tax-Free Savings Account (TFSA), RRSPs come with a contribution limit that increases every year.

When it comes to the best RRSP for your money, our best bet (and reigning champion for the past 2 years) is the online-only EQ Bank.

EQ Bank’s Retirement Savings Plan Account leads the pack with the highest standard interest rate for 2022, giving you the most long-term bang for your buck when it comes to growing your money. Plus, it comes packed with other perks, including: 

• CDIC insured, ensuring that your money is safe and protected by the Government of Canada
• No monthly fees 
• Simple account linking for automated contributions
• Easy to use and no-hassle online portal

Check out Ratehub's Personal Finance Award winners for 2023 to see our opinion of the best accounts on the market today. 

An RRSP Contribution Limit is the maximum amount you can contribute to your RRSP in one year. 

The contribution limit in 2023 equals 18% of your annual taxable income up to a maximum of $30,780. The good news: unused contribution room from your previous years will carry over (you can quickly check your total personal contribution limit online by logging into your CRA account).  

There is an RRSP deadline, which marks the last day a person can contribute to an RRSP and receive tax-benefits for that previous year. The RRSP deadline for the 2022 calendar year is March 1, 2023.

Yes, RRSP contributions reduce your net taxable income. Annual RRSP contributions can help Canadians save for retirement but are also tax deductible. Contributions can be deducted from taxable income when filing your tax return, meaning you can end up paying less taxes. 

Unlike a TFSA, an RRSP doesn’t offer tax-free withdrawals at any time and there are quite a few RRSP withdrawal rules everyone should know about.

An early withdrawal from an RRSP is taxed like regular income, at the same rate as your tax bracket. This is known as RRSP Withholding Tax. The idea being you should wait to withdraw your RRSP until retirement, when you’re in a significantly lower tax bracket and can maximize your tax savings.

An RRSP legally matures on December 31st in the year you turn 71 years old, and your funds can be accessed in one (or a combination of) the following ways:

• Withdraw your funds in cash 
• Convert your RRSP to a Registered Regiment Income Fund (RRIF) and make minimum withdrawals each year
• Use funds to purchase an annuity (offers guaranteed income for a set period of time)

All that said, there are government initiatives that allow you to withdraw certain amounts from your RRSP early before retirement with no penalties - like if you plan to use your funds to buy your first home (Home Buyers' Plan) or advance your education (Lifelong Learning Plan).

As covered above, withdrawing your RRSP early before retirement can have costly tax implications - with two notable exceptions. The Home Buyers Plan and the Lifelong Learning Plan. However, these withdrawals are considered to be loans and must be contributed back into your RRSP over a specific period.

RRSPs offer tax advantages - from tax deferment to reducing your taxable income - that’ll benefit almost all Canadians when savings or investing for future retirement. Aspiring first-time home buyers and those looking to pursue full-time career training or an advanced education are also poised to benefit greatly by funding an RRSP thanks to the Home Buyers’ Plan and Lifelong Learning Plan, which both allow for early, penalty-free withdrawals from your RRSP.

In certain cases, though, choosing a TFSA over an RRSP may be the better alternative. For instance, if you’re saving for short-or-medium term financial goals (like, say, a wedding, a new car, or a house renovation), a TFSA could be more beneficial as it allows for tax-free withdrawals at any time and for any reason. TFSAs may also be the better option if you’re in a lower tax bracket (earning below $50,000) or just starting your career with potential for income growth in the future; the reason being you might not be in the position to benefit as much from the tax deduction advantages offers by an RRSP.