What is it?
Maximizing your registered retirement savings plan (RRSP) contributions is easier than ever with an RRSP loan from the National Bank of Canada. A top-up RRSP loan is a short-term loan you can use to bump your annual contribution to the maximum allowable contribution limit. A catch-up loan is a longer-term loan to help you catch-up on your retirement savings.
How does it work?
If you apply for an RRSP loan today, you also choose the day it becomes effective. For example, you could choose just before the next RRSP contribution deadline. You could also defer the first monthly payment for three or six months and use your tax refund to immediately pay down part of the loan. This would reduce future monthly payments. Both variable and fixed interest rates are available.
There are advantages and disadvantages to borrowing to invest. Anyone considering this strategy should consult their advisor and their tax professional.