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With a TD RSP Loan you can maximize your RSP contribution this year or take advantage of any unused contribution room.
Know what you need to retire
Is this for me? |
If you want a loan to make a contribution for this year |
Maximum Principal Amount |
Up to your unused RSP contribution room for this year. |
Rate |
Variable rates based on TD Prime Rate |
Term/Amortization |
1 year |
Other Details |
You can defer payments but interest will continue to accrue. Please submit your application by the end of February in the current year in order for your contribution to count for the previous tax year. |
Is this for me? |
If you want a loan to catch up on missed contributions from past years. |
Maximum Principal Amount |
Up to $50,000 |
Rate |
Variable rates based on TD Prime Rate |
Term/Amortization |
Fixed rate loan: Maximum 5 year term/10 year amortization (maximum 5 year amortization for Quebec loans) Variable rate loan: Maximum 10 years |
Other Details |
You can defer payments but interest will continue to accrue. |
On-the-Spot RSP Loan
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CarryForward RSP Loan
|
|
---|---|---|
Is this for me? |
If you want a loan to make a contribution for this year |
If you want a loan to catch up on missed contributions from past years. |
Maximum Principal Amount |
Up to your unused RSP contribution room for this year. |
Up to $50,000 |
Rate |
Variable rates based on TD Prime Rate |
|
Term/Amortization |
1 year |
Fixed rate loan: Maximum 5 year term/10 year amortization (maximum 5 year amortization for Quebec loans) Variable rate loan: Maximum 10 years |
Other Details |
You can defer payments but interest will continue to accrue. Please submit your application by the end of February in the current year in order for your contribution to count for the previous tax year. |
You can defer payments but interest will continue to accrue. |
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.
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.
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
|
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.
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
Get details on amounts, rates and more with a side-by-side comparison of all available TD loans.
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Meet with a banking specialist in person at the branch closest to you.
Our banking specialists are ready to answer your questions and can assist you in applying for a loan.
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.