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Registered Retirement Income Funds (RRIFs)

Five types of RRIFs Add to ...

​​The type of RRIF you open will depend on the types of investments you plan to hold.

1. Guaranteed interest RRIF

You can invest in GICs and Canada Savings Bonds, which pay fixed rates of interest over the term that you choose. You can open this type of RRIF at most financial institutions.

It may be a good choice if you:

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  • have a low tolerance for risk,

  • want to protect your principal,

  • want a safe, steady income, and

  • are willing to accept lower growth.

In general, the longer the term of the GIC, the higher the interest rate. It's worth shopping around to compare interest rates.

2. Mutual fund RRIF

You can choose from a variety of mutual funds — ranging from conservative money market funds to more aggressive funds that invest in equities. You can open this type of RRIF at most financial institutions. It may be a good choice if you are looking for higher returns and are comfortable with more risk.

3. Segregated fund RRIF

Segregated funds are similar to mutual funds. You open this type of RRIF at an insurance company. The key difference is that the insurance company guarantees between 75% and 100% of your original investment if you hold your investment for a certain amount of time — usually 10 years.

It may be a good choice if you:

  • want to grow your savings faster than with GICs, and

  • do not want to take on as much risk as with mutual funds (mutual funds do not guarantee your principal).

You'll pay higher fees for these funds than for mutual funds. This is to cover the cost of the insurance protection.

Some insurance companies now offer a “portfolio RRIF.” This combines a mix of GICs and segregated funds in a single RRIF.

4. Self-directed RRIF

You can hold many different kinds of investments in a self-directed plan. Examples: GICsmutual fundsETFssegregated fundsstocks and bonds. You open this type of RRIF at an investment firm.

Choose a self-directed RRIF if you:

  • want a wider range of investment choices,

  • are a knowledgeable investor,

  • feel comfortable making all the investment decisions yourself, and

  • want to be able to change the investments you hold in your RRIF as your needs change or the markets shift.

5. Fully managed RRIF

If you have a lot of retirement savings or a complex financial situation, consider a fully managed RRIF. A professional money manager will create and manage a custom portfolio to fit your financial goals and situation. This process is known as discretionary investment management.

You'll have access to a similar range of investment options as with a self-directed RRIF. You can open this type of RRIF at many financial institutions, but there is usually a minimum amount required to qualify.

You can have as many RRIF accounts as you like. But you must withdraw a minimum amount from each of your RRIFs each year to meet the minimum withdrawal requirement.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

 

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