FundRobot » Mutual Funds » How much return on a RRSP?

Old   #1 (permalink)
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Default return on a rrsp

Ive read all the basics about what an rrsp is. So its just a savings account that u can withdraw from when u retire, right? So what's the interest rate return on this thing? How is it different from other saving accounts?

TheGreat33 is offline   Reply With Quote
Old   #2 (permalink)
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Default return on a rrsp

An RRSP is a savings plan for your retirement. It can be opened at a bank or financial entity or brokerage firm or online. You can hold any type of investment, including bonds, mutual funds, stocks, gics, etc. in this portfolio. The money that you earn in this account, such as dividends or interest, etc. will not be taxed until you withdraw the money, presumably after you have retired. Assuming that you are earning less money after retirement than you are earning until then, you may be taxed at a lower rate than you would pay during the years that you are making contributions. Therefore, people use it as a way to lower their current tax bill.

If you have gics in your RRSP, you will earn the current approximately 2 - 3% on your investment. Should you invest in bonds or mortgage backed securities, you might be able to increase your return up to 7 - 8%. You can also hold stocks or riskier investments and possibly raise your return to a higher level.

Do you already have a TFSA? This is a product that shelters your earnings from the tax man.

Do as much learning about financial products so that you can make knowledgeable decisions about your investments. Research the adviser that you choose, if you choose one. Does he have the education and background to give you good advice or is he simply a salesman?
Trader4Ever is offline   Reply With Quote
Old   #3 (permalink)
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Default return on a rrsp

I don't know why these non-US questions are bleeding over into the "US questions only" selection I have here on answers but anyway---

An RRSP is for canadians and is really a brokerage account where canadians can put money in and make investments. Your rate of return will depend on how clever you are as an investor. Here is what one source says about this account---

An RRSP is not an investment in itself. You'll often hear people talking about the "RRSP they bought"; however, technically, this is both incorrect and impossible. An RSSP is simply an account that holds other investments. It's the same as a regular brokerage account - you don't invest in your brokerage account at Royal Bank or TD Canada Trust, you open an account in which you hold investments.
Cash754 is offline   Reply With Quote


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