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Choosing an RRSP

Understanding self-directed RRSPs Add to ...

​A self-directed RRSP account allows you to play a more active role in choosing and managing the investments in an individual or spousal RRSP.

How self-directed RRSPs work

Self-directed RRSPs are available at investment firms — both full-service and discount brokerage firms. You can hold many different investments in a single self-directed plan. This makes it easier to keep track of your investments and maintain your desired asset mix.

You can choose:

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  • a wider range of investments than are usually available for a bank or mutual fund company RRSP, and

  • investments from a number of different companies.

Do you need investment advice? If you'd like advice on how to invest and manage your RRSP savings, open an account with a full-service brokerage. If you don’t need advice, set up your RRSP account with a discount brokerage and lower the fees you pay. Learn more about getting advice.

Ask about fees

Understand all the fees associated with opening and managing your RRSP. You may pay a set-up fee, an annual trustee fee, and sales charges or commissions for buying and selling investments. You may also pay a fee for investment advice or for managing your investments. Commissions are likely to be lower at a discount brokerage, but you'll need to be comfortable making investment decisions on your own.

Ask your financial institution if they will waive the annual trustee fee. They may agree to do this if you hold other accounts there or if you have enough savings in your plan.

Allocate investments effectively

If you’ve used up your RRSP contribution room and are also saving in a non-registered account, consider holding investments that are taxed at a higher rate, such as GICs and bonds, inside your RRSP. And hold investments that are taxed at a lower rate – those that generate dividends and capital gains – in your non-registered account. This reduces the overall tax you pay and allows your investments to grow in the most tax-efficient way.

Learn more about how investments are taxed.

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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