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Cross-border & specialty

Registered Retirement Savings Plan RRSP

A Canadian retirement account where contributions are tax-deductible and growth is tax-deferred until you withdraw the money.

Part of the Cross-Border Investing (CA + US) course · Lesson 14 of 17

What it is

A Registered Retirement Savings Plan is a Canadian account designed for retirement saving. Contributions reduce your taxable income in the year you make them, and investments grow tax-deferred inside the account. You pay income tax only when you withdraw funds, typically in retirement when your tax rate may be lower.

Why it matters

The RRSP gives an upfront tax break and lets investments compound without yearly tax drag, but every withdrawal is taxed as ordinary income. A notable cross-border advantage is that the Canada-US tax treaty exempts US dividends held in an RRSP from the 15% US withholding tax, making it the most efficient Canadian account for US dividend stocks.

How it's calculated

An RRSP is an account type, not a metric; your contribution room is generally 18% of prior-year earned income up to an annual maximum set by the government, plus carried-forward unused room.

How Quintarthai uses it

Quintarthai does not manage accounts, but you can research a stock's dividend yield and fundamentals to inform account placement across the screener and company pages at /app/.

Cross-border note. Under the Canada-US treaty, US dividends earned in an RRSP are exempt from the 15% US withholding tax, which is not true for a TFSA or a non-registered account.

FAQ

When is the best time to use an RRSP?
The deduction is most valuable when your current tax rate is higher than your expected retirement tax rate, so you save tax now and pay less later. It is less compelling if your income is low today.
Why hold US dividend stocks in an RRSP?
Because the Canada-US treaty waives the 15% US withholding tax on US dividends held in an RRSP, you keep the full dividend, unlike in a TFSA where that tax is lost.
Related terms
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