Ever try to watch a business news or investment channel and get instantly confused by all the jargon? The financial services industry is riddled with acronyms for all sorts of terms.
Often that leaves people scratching their heads trying to figure out what the experts are really talking about. I thought I would take a moment to “demystify” some of those terms for you.
RRSP = Registered Retirement Savings Plan. Sometimes you’ll see this also referred to as an RSP (Retirement Savings Plan) but it means the same thing. It’s a type of plan that is used primarily to save and accumulate money to be used in retirement.
Think of it as a basket that can hold various types of investment options like – cash, high interest savings accounts, Canada Savings Bonds, stocks and mutual funds, just to name a few. Money you put into the basket or RRSP is eligible for a tax deduction in the year the deposit is made and that money grows tax deferred inside the account. The money is only taxable to the account holder when the funds are withdrawn.
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