cashable rrsp | RRSPs and RRIFs | Discussion forum

doc said:

does any bank credit union or trust company in canada have cashable rrsps?

Interesting question. Of course, as you can put almost anything in an RRSP that is cashable like a GIC, Stocks, or Mutual Funds.

I have been advised that I can withdraw RRSP $'s from my RRSP and do not need to set up a RRIF account. You can have a RRIF account before the age of 71.

Questions are ... what ever you put in your RRSP and you liquify it (in full or partially)in your RRSP what is the charge for doing so, what are the tax implications, if you close your RRSP account is there a cost to close your account???

It would be helpful if you explain your reasoning for your question.

Remember, even if it is in savings or a variable RSP, all withdrawals are subject to the minimum withholding tax by CRA.

OPs question suggests a misunderstanding about RRSPs. RRSPs are not stand-alone "investments" that can be "cashed". Think of an RRSP as a basket. You can put just about any kind of investment you want inside that basket… stocks, bonds, GICs, mutual funds, ETFs, and yes, you can hold "cash" in an RRSP in the form of a savings account. Once these investments go inside that basket, they get a special tax status. You don't have to pay the taxes on investment gains on any investments you hold inside this basket. So if your stocks go up… no capital gains tax is payable. If you get dividends or interest income, no tax payable. If your mutual fund units pay distributions, no taxes payable. Plus, you get a big tax deduction equal to the fair-market total of the investments you put in the basket each year… not bad. You only pay taxes on your basket of investments when you liquidate some or all of them and then use the money for something. The CRA treats any money that comes out of your investment basket as income, and you are taxed on that income at your marginal tax rate. So with this in mind, the answer to your question is "yes", most Canadian financial institutions have "cashable" RRSPs… all you need to do is get one of these institutions to set up an RRSP "basket" for you (easy to do with proper ID, you can even do it online with many banks), then open a savings account and put that account in your "basket". Done. (Just to be clear, it doesn't work exactly this way in practice... opening the RRSP "basket" and opening the savings account would be done in one step... you would be opening an "RRSP savings account" or something similar).

A reminder – don't forget to check the safety of some of these financial establishments that are being talked about. Be sure that they are covered under the Canadian protection laws in case these companies go bankrupt and many do. They may have good interest rates but not all are covered under this protection act and you could wind up loosing all monies if the company goes under as they will not be insurred by the federal government. Read the book "Enough Bull" by a certified C.A. Easy to read with excellent info. Identifies things that most people need to be aware of. Cheers.