Frequently Asked Questions
RRIF option
Q: What is a Registered Retirement Income Fund (RRIF)?
A RRIF uses your RRSP savings to provide you with a regular retirement income over your lifetime or until your RRSP savings are paid out. It also allows your savings to retain their tax-deferred status until the funds are withdrawn, while allowing you to control the pace of the withdrawals. The amount withdrawn, however, is subject to an annual minimum amount required by law.
By law your RRSP must be de-registered by the end of the year in which you turn 71. At that time you may divest your RRSP and take a lump sum cash payment but you will have to include the full amount as taxable income. Alternatively, you may purchase an annuity or transfer your RRSP to a RRIF.
Q: What is the RRIF option?
When you select the RRIF option you transfer your RRSP savings to The Canada RIF. You can transfer the proceeds from another RRSP or RRIF to The Canada RIF to purchase compound interest Canada Savings Bonds (the CSB and the CPB) during any sales campaign. The minimum purchase amount within The Canada RIF is $500 per series whereas the maximum ownership amount is $500,000 per series.
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Q: What is The Canada RIF?
The Canada RIF is a specially designed no-fee RRIF, eligible to hold both compound interest CSB and CPB. The Canada RIF is the plan opened when you choose the RRIF option.
Q: Can I transfer cash held in RRSPs or RRIFs at financial institutions into The Canada RIF?
Yes, but only during a bond sales campaign period (i.e. from early October to April 1). Cash received during this period will be used to purchase a compound interest CSB or CPB. Please visit your financial institution to complete the transaction.
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Q: How can I transfer my RRSP or RRIF from my financial institution to The Canada RIF?
You will need to visit any financial institution selling the CSB and CPB and ask them to initiate the transfer with the financial institution that is currently administering your RRSP or RRIF. You’ll need to complete a transfer request (using Transfer Form T2033 or its equivalent) and the RIF purchase application form (Form #3).
Q: Can I transfer securities from other financial institutions to The Canada RIF?
No. The only investments permitted in The Canada RIF are Canada Savings Bonds (the CSB and CPB). Therefore only transfers (in-kind) of unmatured compound interest Canada Savings Bonds held in other RRSPs or RRIFs are allowed. Other securities must be redeemed prior to the transfer, with the cash proceeds then transferred to The Canada RIF for the purchase of a CSB and/or a CPB during a sales campaign period. Only compound interest Canada Savings Bonds can be held in The Canada RIF.
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Q: How do I transfer bonds from The Canada RSP to The Canada RIF?
Contact the Trustee at 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.
Q: Can I contribute directly to The Canada RIF?
No. You can only transfer existing RRSP or RRIF proceeds into The Canada RIF and hold compound interest Canada Savings Bonds (the CSB and the CPB) in this plan.
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Q: What is the minimum purchase within The Canada RIF?
The minimum purchase amount of a CSB or CPB within The Canada RIF is $500 per bond series.
Q: Can I transfer bonds from The Canada RIF to another RRIF/RRSP at a financial institution?
Yes. You may transfer your bonds “in-kind” from The Canada RIF to other registered plans at any time. You can also redeem your Canada Savings Bonds (subject to their terms and conditions) and transfer the cash proceeds to another RRSP/RRIF. Simply contact the Trustee in writing.
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Q: Can investments be exchanged within The Canada RIF?
Yes. If you are currently holding a CSB or CPB within The Canada RIF, you can redeem the old series (subject to their terms and conditions) and buy the new issue within The Canada RIF during any sales period (i.e. from early October to April 1). To do this, contact the Trustee in writing.
Q: How are regular periodic payments made?
Payments are made by electronic funds transfer to the annuitant's bank account, or by cheque mailed to an address specified by the annuitant. Periodic payments are issued for the first business day of the month and they are taxable.
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Q: Is there a minimum payment amount?
Yes. The annual minimum amount withdrawn must meet the legislated annual minimum payment amount required by the Income Tax Act (Canada). The Canada RIF also has a minimum of $25 per payment. You can elect to receive more than the legislated annual minimum amount.
Q: What if my payments don't meet the annual minimum requirement?
In this case, an additional payment will automatically be made by December 31 to satisfy the legislative requirement.
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Q: How do I calculate my annual minimum payment?
Current legislation provides annual payment factors that are based on the annuitant's (or spouse's) age and when multiplied by the market value of your RRIF as at January 1, will indicate how much is required to be withdrawn for the year.
Q: How will I know what my annual minimum payments will be each year?
Your December 31st statement, usually mailed no later than the third week of January, will provide you with this information.
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Q: Why would I use my spouse's birth date to calculate my annual minimum payment?
If your spouse is younger, the legislated annual minimum payment will be lower; therefore, both the continued tax deferral of the proceeds within the RRIF and the amount of income it earns within the RRIF would be greater.
Q: Can I receive my payments at any time?
Payments are made every month, every two, three, four, six or 12 months. Periodic payments are issued for the first business day of the month.
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Q: Can I change my payment amount or my payment frequency?
Yes. You can change your payment amount or frequency at any time by giving a written notice to the Trustee as long as the minimum $25 per payment and legislated annual minimum amount are met.
Q: Can I make more than one lump sum withdrawal each year?
Yes. They can be made at any time (subject to the terms and conditions of the individual bonds) by writing to the Trustee. Lump sum withdrawals are subject to withholding tax.
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Q: Can I receive my first periodic payment in December of this year?
Yes. Simply submit a written request to the Trustee.
Q: Can I specify which assets are to be depleted first to make payments?
For regular periodic payments, annuitants cannot instruct which assets are to be used.
Because of their different liquidity features, payments will be taken from the CSB first, followed by the CPB. Within each bond category, payments are taken out of the bond with lowest yield. If two or more bonds have equally low yields, then payments are taken out of the bond with the lowest interest rate. If two or more bonds have equally low yields and interest rates, then payments are taken out of the bond with the shortest term to maturity. Payments are taken from both principal and interest on a prorated basis.
For lump sum withdrawals, annuitants can request a specific bond from which to take the withdrawal (subject to the terms and conditions of the individual bonds). Payments made are taken from both principal and interest on a prorated basis.
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Q: Are periodic payments subject to tax?
Yes, they are subject to federal and provincial income tax in the year received. If your marginal tax rate is higher than the withholding tax rate, you will likely owe further income tax when you file your tax return. Withholding tax deducted at source can be reported as income tax paid during the year on your tax return.
Q: Will I receive RRIF statements showing account balances?
Quarterly statements of account will be produced as at March 31, June 30, September 30 and December 31. The December 31 statement will outline the payment details for the following year.
A confirmation will also be mailed to you by the 15th of the month following the date the RRIF 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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