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Is it Better to Invest in RRSPs or in a Non-Registered Account?
For most Canadian taxpayers, it is better to invest in RRSPs, because:
 | you will probably be in the same or a lower tax bracket when you retire |
| your investment income grows tax-free inside the RRSP |
| you can invest in stocks, bonds, foreign and other investments without worrying about the tax implications |
| you are less likely to withdraw the money than if you are saving it in an unregistered account, so you will build up a sizeable nest egg by retirement |
| you can invest more because you'll have more after-tax funds to invest due to the tax savings! |
It may be better to invest in a non-registered account (but probably not) if:
| you will be in a higher tax bracket after retirement, and |
| you invest all your money in investments which produce capital gains or eligible Canadian dividends, and |
| you are comfortable not owning any bonds or other interest-producing investments, and |
| you do not sell any investments until retirement, because the sale would generate taxable capital gains. |
Tax Tip: most people should invest in RRSPs!
See Why investing within an RRSP makes sense for tax purposes no matter what you believe, by Jamie Golombek, FCA, FCPA, CFP, CLU, TEP.
TaxTips.ca Resources
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Revised: June 25, 2025