Frequently Asked Questions
RRSP option
Q: What is a Registered Retirement Savings Plan (RRSP)?
An RRSP is one of the best ways to save for your retirement. When you invest in an RRSP, within the limits prescribed by the Canada Revenue Agency, you may defer some of the income tax you would otherwise pay. As long as you keep your savings in your RRSP, both your investments and the income they earn are tax-deferred, ensuring faster growth than if those same investments were held outside of the RRSP.
Moreover, with RRSP contributions you can take advantage of a tax deduction. To be eligible for a 2006 RRSP deduction, contributions to your RRSP must be made on or before March 1, 2007.
Q: What is the RRSP option?
The RRSP option allows you to purchase a CSB or a CPB directly in The Canada RSP, a no-fee plan created when the RRSP option is selected.
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Q: What is The Canada RSP?
The Canada RSP is a specially designed no-fee RRSP for holding compound interest Canada Savings Bonds (the CSB and the CPB) as investments. The Canada RSP is created when you choose the RRSP option.
Q: Can I contribute directly into The Canada RSP?
Yes. You can do so when you choose the RRSP option when you purchase the CSB and the CPB as investments during any sales campaign. The minimum purchase for both the CSB and the CPB with the RRSP option is $500 per series per registration up to a maximum ownership amount of $500,000 per series per type of registration (some exceptions apply), subject to the maximum amount established for the taxation year under the Income Tax Act (Canada) and the annual limit prescribed by the Canada Revenue Agency based on your income. If you already have a Canada RSP plan number, please indicate it on the application form for The Canada RSP (form 2).
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Q: I already own a compound interest CSB (or a compound interest CPB). Can I transfer this bond to The Canada RSP to take advantage of the RRSP tax deduction?
Yes. You can transfer all or part of your unmatured compound interest Canada Savings Bonds into The Canada RSP (subject to the limits prescribed by the Canada Revenue Agency). This is an easy way to take advantage of the RRSP tax deduction while continuing to benefit from the guaranteed rates on these bonds. Simply call 1 800 575-5151 to make arrangements at no charge to you! The toll-free number is 1 877 899-3599 for a CSB purchased through the Payroll Savings Program. The minimum amount in bonds that can be transferred to The Canada RSP is $500 per series.
Q: Is it possible to contribute to The Canada RSP on behalf of a spouse?
Yes, you may open The Canada RSP for your spouse with yourself as the contributor (i.e. spousal Plan). With a spousal Plan, you, as the contributor, can claim the tax deduction. The owner of the RRSP is your spouse.
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Q: Can I transfer cash held in RRSPs at other financial institutions to The Canada RSP?
Yes. Cash transfers to purchase compound interest Canada Savings Bonds are permitted, but only during a sales campaign. Please visit your financial institution to complete the transaction.
Q: Can I transfer securities from other financial institutions to The Canada RSP?
No. The only investments permitted in The Canada RSP are compound interest Canada Savings Bonds (the CSB and the CPB). Therefore only transfers (in-kind) of unmatured compound interest Canada Savings Bonds held in other RRSPs or RRIFs are allowed. Other securities must first be redeemed, and then the cash proceeds can be transferred to The Canada RSP for the purchase of compound interest Canada Savings Bonds. Cash transfers to purchase compound interest Canada Savings Bonds are permitted only during a sales campaign.
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Q: Can investments be exchanged within The Canada RSP?
Yes. If you are currently holding the CSB or the CPB within The Canada RSP, you can redeem the old series, subject to their terms and conditions, and buy the new issue within The Canada RSP during any sales campaign by writing to the Trustee.
Q: Can I transfer out of The Canada RSP?
The annuitant can transfer out a CSB and CPB in-kind from The Canada RSP to another registered plan, usually a self-directed plan, at any time. You can also redeem your CSB and CPB subject to their terms and conditions and transfer the cash proceeds to another RRSP or to a RRIF. Simply contact the Trustee in writing.
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Q: Can I withdraw from The Canada RSP?
Yes. You can redeem your CSB and your CPB subject to their terms and conditions and withdraw the amount from The Canada RSP. As with all RRSPs, tax will be withheld from the proceeds and you will have to declare the proceeds as income in the year in which the CSB or the CPB is withdrawn.
Q: How can I redeem my CSB or CPB held in The Canada RSP?
The CSB and the CPB can be redeemed subject to their terms and conditions by writing to the Trustee of The Canada RSP at:
Canada Savings Bonds
Registered Products
P.O. Box 2390, Station D
Ottawa, Ontario
K1P 1K8
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Q: Is there an age restriction for holding an RRSP?
Yes, individuals may not hold RRSPs past December 31 of the year in which they turn 69 years of age.
Q: What happens to my CSB and CPB investments in The Canada RSP when I reach the age of 69?
If you do not provide written instructions to the Trustee and you have a minimum balance in The Canada RSP of $500, they will automatically transfer the investments in The Canada RSP to The Canada RIF to avoid having you pay tax on the total proceeds. The RRIF will be set up such that you will receive the annual minimum amount required to be withdrawn in one periodic payment on December 1 of each year until you provide the Trustee with alternate instructions. If your balance is less than $500 the Trustee will cash out your investment, deduct withholding taxes and send you the remainder of the funds. A notice will be sent to you by the Trustee a minimum of 90 days prior to December 31 of the year in which you turn 69 advising you of the above.
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Q: What happens when my CSB and CPB investments in The Canada RSP mature?
Unless you advise the Trustee, the bonds will be automatically rolled over and the proceeds reinvested in a similar Government of Canada investment product available at that time. The Trustee will notify you before any investments in your plan mature.
Q: How often are statements for The Canada RSP issued?
Statements of account will be issued by the Trustee on a semi-annual basis, as at June 30 and December 31.
A confirmation will also be mailed to you by the 15th of the month following the date the RRSP was opened.
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Q: How do I contact the Trustee?
By writing to:
Canada Savings Bonds
Registered Products
P.O. Box 2390, Station D
Ottawa, Ontario
K1P 1K8
or by calling toll-free 1 800 575-5151, Monday to Friday, from 8 am to 8 pm, Eastern Time. The toll-free number is 1 877 899-3599 for a CSB purchased through the Payroll Savings Program.
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