What kinds of investments can my RRSP hold?

Investments that are allowed to be held in an RRSP are referred to as qualified investments. According to the CRA, the following types of investments are permitted to be held in an RRSP: cash, mutual funds, securities listed on a designated stock exchange, guaranteed investment certificates, bonds, certain shares of small business corporations. Accounts can be opened and investments can be made through most financial institutions. Once the money is deposited, individuals can choose to either invest the money themselves (self-directed) or let others help them invest and grow their money (through robo-investing or working with an advisor).

What happens if I contribute more than my RRSP limit?

Individuals need to pay special attention to ensure that they are not overcontributing to their RRSP. In the event that an overcontribution occurs, individuals will be required to pay a monthly 1% fee on overcontributions. To avoid this, it may be a good idea to wait until you receive your T4 at the end of the year to see what your contribution room will be and then make a lump-sum contribution before the deadline at the end of the year. This way, you can take advantage of the tax benefits and not be at risk of overcontributing and facing penalties.

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