With a TD RSP Loan you can maximize your RSP contribution this year or take advantage of any unused contribution room.
The maximum amount you can contribute to your RSP or TFSA
Amortization period is the length of time it takes to pay your loan in full, assuming the same interest rate and payment amount throughout. Shortening your amortization period can help you reduce interest cost over the period but it will also increase your payments.
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About TD RSP Loans
Get the most from your RSPs
Benefits of TD RSP Loans
Reduce your taxes
Making a contribution up to your maximum contribution amount may help to reduce the taxes that you are required to pay.
Repayment schedule
We’ll help you create a repayment schedule with a term and amortization period that works for you
Interest rate options
Choose between a fixed or variable interest rate depending on what’s best for you.
Deferred payment option
You can defer payments for up to 120 days but interest will continue to accrue.
Retirement Savings Calculator
Know what you need to retire
Answer a few quick questions and we'll tell you where you stand and how much to save to reach your retirement goals.
Choose one of our RSP Loans
On-the-Spot RSP Loan
Is this for me?
If you want a loan to make a contribution for this year
A Registered Savings Plan (RSP) Loan is a way to get the funds you need to maximize your RSP contributions, every year and for past years.
If you have an existing Retirement Savings Plan and make regular contributions, but you haven’t been able to save quite enough to maximize your contribution amount each year, you can use an RSP Loan to help make up the difference.
An RSP Loan lets you borrow money in order to help you put more money away now for retirement, and the funds go straight into your RSP. It works just like a regular loan, where you will pay back the amount you borrowed over a specific period of time, except that RSP loans are often shorter than other types of loans.
Why maximize your RSP?
Most Canadians don't make the maximum RSP contribution they're entitled to make each year, and miss out on the chance to reach their savings and retirement goals faster.
By bridging the gap between your current contribution level and the maximum contribution amount, you can reduce the amount of tax you pay and boost your retirement fund.
Maximizing your RSP contribution pays off
Borrow $1,000 and contribute it to RSP
$1,000
Return on RSP investment at 6% for 1 year
$60.00
Return on RSP investment at 6% for 10 years
$790.85
Return on RSP investment at 6% for 40 years
$9,285.72
Repay loan over 12 months - total of payments
$1,033.00
Loan interest paid over the 12 months
$33.00
Earning interest
The example above assumes that your RSP investment earns 6% interest compounded annually, the loan interest rate is 6% (charged and calculated on a daily basis on the unpaid principal amount commencing on the date the loan is advanced)per year and the loan is repaid in 12 equal monthly installments of approximately $86.1
If you invest your income tax refund in your RSP, it can earn tax-deferred interest until it is withdrawn. Or you can use it to pay off your RSP loan early with no charge, or to pay down other debts.
Catch up on missed contributions
Even if you’ve missed the chance to top up your RSP contributions in past years, you can catch up quickly with an RSP loan that will allow you to take advantage of income tax breaks and grow your retirement savings tax-free.
The included chart shows the one and 10-year growth potential of two RSP Loan2 amounts at an average annual rate of return of 6%.1
As you can see, borrowing $30,000 could create an additional $23,725 after 10 years.3
Things to Consider
Using credit to contribute more money to your RSP may be the best way to build up your nest egg, but consider these factors before making a decision.
Age: Loans with a long payback period may not make sense close to retirement because the benefits are greatly reduced
Ability to Repay: Don't borrow more than you can repay because it may make it difficult to save for the next year's RSP contribution.
Ability to Borrow: An RSP loan will increase your debt service ratio, which may make you ineligible for additional loans down the road while this one is outstanding
The interest rate stays the same for the time period chosen
Loans are available with a variety of terms. The term is the length of your current loan agreement. Typically, terms range from 1 to 5 years. When a term ends, any balance you still owe can be repaid in full, or you may be offered a renewal term at current interest rate.
The interest rate changes whenever TD Prime Rate changes
What you’ll need to bring
Hold a TD Investment account or open one while applying for the RSP Loan.
Social Insurance Number.
Current address and previous address (if current address is less than 3 years).
Your income (sources and amount).
Your monthly mortgage or rent amount.
Your monthly payments (loans, credit cards, lines of credit), and household costs (utility, property tax).
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Decide which loan is right for you
Get details on amounts, rates and more with a side-by-side comparison of all available TD loans
1 Rates are for illustrative purposes only. They are not intended to be representative of current rates.
2 Subject to meeting TD Canada Trust lending criteria. Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines.
3 The figures used in this example are for illustrative purposes only. Figures are not intended to represent present or future rates of return. The cost of borrowed funds is not included.
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