Self-Directed RRSP

AAA

DEFINITION of 'Self-Directed RRSP'

A type of RRSP (Registered Retirement Savings Plan) whose owner determines the asset mix held in the trust. An RRSP is a Canadian retirement savings vehicle to which contributions are tax deductible on an annual basis, up to a certain amount. With a self-directed RRSP, an investor can determine the portfolio of investment products in his or her RRSP. Investments that are not RRSP eligible, however, are sill not allowed in a self-directed RRSP.

INVESTOPEDIA EXPLAINS 'Self-Directed RRSP'

Aside from the tax advantage provided by the Canadian federal government, a self-directed RRSP account is very similar to a regular investment account.

Owners of self-directed RRSPs are responsible for ensuring that their RRSP investments meet the legal requirements set by the Canada Revenue Agency. The penalty for not meeting these requirements is the loss of the income tax deduction.

To learn more about RRSPs, check out How are Registered Retirement Saving Plans (RRSPs) taxed?

RELATED TERMS
  1. Registered Pension Plan - RPP

    A form of a trust that provides pension benefits for an employee ...
  2. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  3. Deduction

    Any item or expenditure subtracted from gross income to reduce ...
  4. Deferred Account

    An account that postpones tax liabilities until a future date. ...
  5. Registered Retirement Income Fund ...

    A retirement fund similar to an annuity contract that pays out ...
  6. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used ...
RELATED FAQS
  1. How does a Registered Retirement Savings Plan (RRSP) loan work?

    The Government of Canada created Registered Retirement Savings Plans to allow Canadians to contribute tax-deferred income ... Read Full Answer >>
  2. When can you withdraw your savings from a Registered Retirement Savings Plan (RRSP)?

    The standard age for withdrawing savings from a Registered Retirement Savings Plan (RRSP) is 71. Once you have reached this ... Read Full Answer >>
  3. What are the differences between a Registered Retirement Savings Plan (RRSP) and ...

    Registered Retirement Savings Plans (RRSP) and Registered Pension Plans (RPP) are both retirement savings plans that are ... Read Full Answer >>
  4. What should you consider before taking a loan on your Registered Retirement Savings ...

    Deciding to borrow money from your retirement plan can be complicated. If you are considering taking out a loan from your ... Read Full Answer >>
  5. What are the penalties for early withdrawal from a Registered Retirement Savings ...

    Withdrawing from your Registered Retirement Savings Plan (RRSP) before retirement carries several penalties. Penalties for ... Read Full Answer >>
  6. What are the Registered Retirement Savings Plan (RRSP) contribution limits?

    As of 2014, the annual contribution limit for Registered Retirement Savings Plans is the lesser amount of 18% of your earned ... Read Full Answer >>
  7. How are Registered Retirement Saving Plans (RRSPs) taxed?

    A registered retirement savings plan is a tax-deferred retirement plan that is registered with the Government of Canada. ... Read Full Answer >>
  8. What are the main differences between a Registered Retirement Savings Plan (RRSP) ...

    A registered retirement savings plan is a financial product designed to help you save for your retirement, and a registered ... Read Full Answer >>
  9. How and when can you convert a Registered Retirement Savings Plan (RRSP) into a Registered ...

    If you are wondering about a conversion from your Registered Retirement Savings Plan, or RRSP, into a Registered Retirement ... Read Full Answer >>
Related Articles
  1. Savings

    5 Resources To Learn To Retire Rich

    Find out what you need to know to plan for retirement, and which resources do the best job of showing the way.
  2. Retirement

    Saving For Retirement: The Quest For Success

    We'll show you how to set yourself up to retire in style.
  3. Retirement

    What's The Difference Between Retiring In Canada And America?

    American and Canadian governments provide many of the same types of services, but the subtle differences between the two countries are worth noting.
  4. Taxes

    Capital Gains Tax 101

    Find out how taxes are applied to your investment returns and how you can reduce your tax burden.
  5. Options & Futures

    Business Owners: Avoid Enron-esque Retirement Plans

    If your business administers a retirement plan, you should recognize what's at stake.
  6. Options & Futures

    Retirement Planning Basics

    Realizing your post-work goals need not be daunting. We'll tell you everything you need to know to get - and stay - on track.
  7. Retirement

    Can Retirement Damage Your Health?

    Experts say there's a right way and a wrong way to do everything, even retire.
  8. Retirement

    Is Your Mortgage Robbing Your Retirement?

    If you picked the mortgage with the lowest possible monthly payment, you may be blowing what could be your retirement money on mortgage interest.
  9. Retirement

    Top 5 States That Save The Most For Retirement

    Wondering if you can live somewhere that's better for building a nest egg? Don't just stick a pin in the map. Consider these pointers.
  10. Retirement

    Retire In Indonesia With $200,000 Of Savings?

    It's very doable. Here's why.

You May Also Like

Hot Definitions
  1. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  2. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  3. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  4. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  5. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  6. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!