Updated: April 2025  |  bremo.io financial guides

RRSP Savings in Canada: How to Save Smarter in 2025

The Registered Retirement Savings Plan (RRSP) is Canada's most powerful tax-deferred savings vehicle. While most people think of RRSPs purely as an investment account, you can also hold simple savings — including high-interest savings accounts and GICs — inside your RRSP to earn guaranteed, tax-deferred returns.

How RRSP Savings Work

When you contribute to an RRSP, your contribution is deducted from your taxable income for that year, giving you an immediate tax refund. Inside the RRSP, your money grows tax-deferred — you don't pay tax on interest, dividends, or capital gains until you withdraw funds in retirement, when you'll typically be in a lower tax bracket.

Types of Savings Inside an RRSP

RRSP High Interest Savings Account

Many institutions offer RRSP savings accounts that function like a HISA but inside the tax shelter. Interest accumulates tax-deferred, and some institutions pay competitive rates on these accounts — though rates are sometimes slightly lower than their non-registered equivalents.

RRSP GICs

Holding a GIC inside your RRSP combines guaranteed returns with tax deferral. When your RRSP GIC matures, the proceeds stay inside the RRSP and can be reinvested — no tax is triggered until you withdraw from the RRSP itself.

When to Choose RRSP Savings Over Investing

Conservative RRSP savings (HISAs, GICs) make sense for:

• Money you'll need within 1–5 years (e.g., first home via HBP)
• The fixed-income portion of a balanced RRSP portfolio
• Savers close to retirement who want to reduce risk
• Money waiting to be deployed into investments

RRSP Home Buyers' Plan

The Home Buyers' Plan (HBP) allows first-time home buyers to withdraw up to $60,000 from their RRSP tax-free to use as a down payment. The withdrawn amount must be repaid over 15 years. If you're saving for a home via your RRSP, a HISA or short-term GIC inside the RRSP keeps your down payment safe and growing.

RRSP vs. TFSA for Savings

Both are excellent, but the TFSA is generally better for savings that you might need before retirement — withdrawals from a TFSA don't trigger tax, and your contribution room is restored. The RRSP is best for high earners who want the upfront tax deduction and won't need the money until retirement.

RRSP Contribution Deadline

RRSP contributions for a given tax year must be made by March 1 of the following year (60 days after year-end). Contributions made in the first 60 days of the year can be applied to the previous or current tax year — your choice.

Getting the Best RRSP Savings Rate

Shop around for RRSP savings accounts just as you would for non-registered HISAs. Online banks and trust companies (EQ Bank, Oaken Financial) often offer better rates on RRSP savings accounts than the big five banks. Compare rates before rolling your RRSP into the default option at your primary bank.