Golden Horseshoe Credit Union

Registered Retirement Savings Plan

A Registered Retirement Savings Plan (RRSP) is a savings plan for retirement that is regulated by the Canadian government. An RRSP has tax benefits; money that is put into an RRSP is deducted from your taxable income and therefore reduces the amount of income tax that you have to pay that year. Income earned in an RRSP is usually tax-sheltered for the duration of the plan however early withdrawals or payments from your matured plan is usually taxed. For most people at retirement, less tax is paid on their RRSP when they start withdrawing from their plan because they are in a lower tax bracket than when they were making contributions.

Not only can you defer payment of income tax until retirement (when you are presumably in a lower tax bracket) but you can contribute to a RRSP and use it to purchase your first home or to go back to school. For more information on the First Time Home Buyer's Plan, click here and for the Lifelong Learning Plan, click here.

The amount that you can contribute to your RRSP is your RRSP deduction limit. This can be found on your "Notice of Assessment" (T1028) that you receive once you have completed your taxes for the year.

To learn more about RRSPs, please refer to the Canadian Revenue Agency website.

Golden Horseshoe Credit Union offers variable and fixed term RRSPs up to 3 years. A variable RRSP deposit allows you to gradually build up your RRSP (minimum of $500) so that it can eventually be transferred into a fixed term deposit to receive a higher interest rate. This can be done automatically through your payroll deduction. To set up a payroll deduction into an RRSP, please visit either of our branches and speak to a Member Service Representative. Remember that all deposits in registered savings plans are fully insured by the Deposit Insurance Corporation of Ontario!