RRSP
A Registered Retirement Savings Plan (RRSP) is a savings account which allows you to defer paying tax on funds deposited to it. When you make a contribution to your RRSP, you get a tax deduction for the amount contributed. The deduction reduces taxable income. Income earned in an RRSP is not taxable while it remains in the RRSP, including interest and so it can continue to grow tax free until the money is withdrawn.
Funds can be withdrawn from an RRSP at any time, but all withdrawal amounts must be included in taxable income. At the time funds are withdrawn, tax will be withheld based on the total withdrawal amount.
Funds can remain in an RRSP until the year the taxpayer turns 71, at which time the funds must be withdrawn, or converted into a Registered Retirement Income Fund (RRIF).
Interest is calculated daily and accrued annually on December 31. Participants will receive annual Investment Statements (after December 31 month end) which will indicate the amount of compounded interest their investment has earned in the calendar year. T4RSP’s and receipts for March 2 to December 31, will be mailed after December 31 month end and contribution receipts for the first 60 days of the year will be mailed after March 2 each year.
Transfers from other financial institutions are available upon request.
For additional information on Registered Retirement Savings Plans go to Canada Revenue Agency’s website.