Long gone are the days when saving for retirement meant putting your RRSP money into interest-paying bank deposits and Canada Savings Bonds, or choosing from a menu of mainstream mutual funds. Today, as the financial product shelf expands, the options for self-directed RRSP investors are more diverse than ever.
Flexibility is undoubtedly good for investors. However, the growing number of RRSP-eligible products, combined with changing tax rules and inconsistent policies among financial institutions, make it challenging to know exactly what you may or may not hold in your plan.
What's the penalty for holding dividend stocks in a TFSA?
What's more, the extent to which you can take advantage of the more accommodating tax rules may ultimately depend on what your RRSP provider will allow. Unfortunately, a definitive list of what qualifies for an RRSP is not all that easy to come by. It's designed for use by CRA staff and by tax professionals. The document also does not address changes that have happened since its publication in What it comes down to is that most widely held investments such as mutual funds, exchange-traded funds, segregated funds, cash deposits, guaranteed investment certificates and government bonds are allowed, as are stocks and bonds of corporations listed on the major Canadian stock exchanges and eligible foreign exchanges.
Whether an investment qualifies for an RRSP is generally tied to a change in regulations concerning eligible stock exchanges. Following through on an amendment announced in the federal budget, the federal Finance Department released new guidelines for three categories of stock exchanges: A stock is RRSP-eligible only if it's listed on a designated stock exchange. To earn that status, a stock exchange -- foreign or Canadian -- must successfully meet our federal government's criteria for governance, regulations and transparency.
Corporate bonds issued by companies listed on those exchanges also qualify to be held in the RRSPs of Canadians. However, securities that trade on over-the-counter markets, even if those markets are overseen by a designated exchange, do not qualify for RRSPs.
The list of 38 designated stock exchanges see table includes all former "prescribed" stock exchanges -- the term previously used to identify RRSP-qualifying stock markets. Investments that qualify to be held in your RRSP are generally also eligible for registered education savings plans RESPsregistered retirement income funds RRIFs and the recently introduced registered disability savings plans, as well as for tax-free savings accounts TFSAs.
There are, however, some important differences among these types of plans. For example, you may not hold your mortgage in your TFSA -- something that is allowed, with conditions, in your RRSP. As well, the penalties for acquiring or holding prohibited investments may also differ. Meanwhile, holding an unqualified investment stock broker studies an RESP could lead the plan to lose its registered status and be revoked altogether.
In addition to listed securities, many more specialized investments are RRSP-eligible. They include shares of Canadian private companies with tactical stocks for remington 597mortgage-backed securities and even your own mortgage, provided it's not in arrears and you meet certain other conditions.
TFSAs, RRSPs: ‘Where should I hold U.S. dividend stocks?’ | Financial Post
One recently added specialty asset is gold and silver in the form of coins, bullions, wafers or certificates. Introduced in the federal budget, the amendment comes with strict conditions.What is an RRSP?
The rules for gold, for example, dictate that it must be As well, gold and silver coins must be can i hold stocks in my rrsp by advantages of binary option strategies pdf Royal Canadian Mint and their market value is based on the metal content, not their worth as collectibles.
While most brokers may well accommodate investors who want to hold gold certificates, on a practical level it can be difficult to find a financial institution to facilitate holdings of investment-grade gold bars and bullions in RRSPs.
Also inOttawa changed the jacque coe stockbroker regarding derivatives in RRSPs.
Previously, RRSP investors could buy and sell call options only as long as the underlying security was RRSP-eligible. In addition, when selling call options the plan holder must have the underlying security in the RRSP. Now, investors have the ability to also buy put options in their RRSPs, again on condition that the underlying security is itself a qualified investment.
Put options give the holder the right to sell the underlying security at a specified price. Since short-selling is not allowed in RRSPs, purchasing puts can be an effective strategy if you anticipate and want to take advantage of a drop in a stock's price. Puts can also be bought as insurance against losses for stocks held in an RRSP. However, despite being permitted by tax laws, the use of derivatives, including options, is restricted by most brokerage firms.
It's email recall option in outlook 2007 for brokers to require a certain level of investment knowledge for derivatives trading, so you'll need the approval of your RRSP provider in order to employ any strategies involving options in your plan.
Should I keep my dividend stocks in an RRSP? - The Globe and Mail
Another permitted strategy in RRSPs, which probably affects a great number of investors, is the ability to hold foreign currencies. According to the CRA, money denominated in any currency is a qualified investment in an RRSP. Exceptions are collectibles and when the market value of the money is greater than impots sur les stock options value as legal tender. Furthermore, in Marchsecurities regulators in Canada amended its bylaws and regulations to assert that foreign cash balances are permitted in RRSPs.
In practice, however, most RRSP investors remain unable to hold foreign currencies, not even U. Citing the inability of their internal systems to maintain foreign currencies in registered accounts, nearly all brokerage firms routinely convert foreign-currency cash balances to Canadian dollars.
This includes any proceeds from the sale of securities denominated in foreign currencies. Click here to search by Fund Sponsor. Membership Home Portfolio My Alerts Funds Stocks ETFs Markets Personal Finance Library Events.
What can you hold in your RRSP? Investors may not be able to take advantage of greater freedom. June Yee is a researcher, writer and editor who covers investment funds. She is a co-author of the managed funds sections of the Canadian Securities Course, and has authored or co-authored articles for numerous media and research organizations. She is a founding member of the Canadian Investment Funds Standards Committee.
Permitted holdings for RRSPs and TFSAs are not identical Investments that qualify to be held in your RRSP are generally also eligible for registered education savings plans RESPsregistered retirement income funds RRIFs and the recently introduced registered disability savings plans, as well as for tax-free savings accounts TFSAs.
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