What Investments Can be Held in an RRSP, RRIF, RESP, RDSP or TFSA?

Income Tax Act S. 146(1), S. 204, Reg. 4900

There are many investments which can be held in an RRSP, RESP or RRIF, RDSP and Tax Free Savings Accounts (TFSA - see link at bottom) including:

money that is legal tender in Canada, and deposits of such money.

Foreign currencies are qualified investments, subject to certain limitations. See Money and deposits of money in the Canada Revenue Agency (CRA) Folio S3-F10-C1 - Qualified Investments. Prior to March 31, 2006, foreign currency cash balances were not allowed under the bylaws and regulations of the Investment Dealers Association (IDA) of Canada. See the IDA bulletin #3522 from March 2006 regarding the amendments which now allow foreign currency cash balances in RRSPs.

Most brokerages now provide the option of holding foreign currencies in registered accounts. Brokerages make money every time foreign currencies are converted to Canadian funds, so there was not much incentive to provide this service, other than it makes their brokerage much more attractive to RRSP holders. To reduce the cost of foreign currency transactions in registered accounts if your brokerage does not provide the option of holding foreign currencies, see our article on washing trades.

Canadian federal, provincial and municipal government bonds or similar obligations

bonds and similar obligations of corporations, the shares of which are listed on a prescribed stock exchange

certain annuities, if purchased from a licensed annuities provider

securities listed on a designated (formerly prescribed) stock exchange in Canada or other countries. ITA s. 204, para. (d) of "qualified investment"

	*Exception* - futures contracts or other derivative instruments in respect of which the holder's risk of loss may exceed the holder's cost.
	Note that most Canadian and US stock exchanges are included here, but *Over-the-Counter Facilities* such as NASDAQ OTC Bulletin Board facility, and the Canadian OTC Automated Trading System are *not included* in the list of designated stock exchanges. The regular NASDAQ system is included in the designated stock exchanges. See the Department of Finance document Designated Stock Exchanges.
	If you're not sure about the eligibility of a particular stock or ETF, check the website of the issuer for details.

guaranteed investment certificates (GICs)

exchange-traded funds, i.e., funds which have the purpose of holding the securities included in a stock exchange index, in the same portions as the securities are reflected in the index, or of replicating the investment performance of a stock exchange index. Examples of exchange-traded funds are SPDRs (Standard & Poor 500 Depository Receipts), Diamonds (Dow Jones Industrial Average units), and MSCI funds (Morgan Stanley Capital Investment Index).

	under certain conditions, shares of small business corporations
	under certain conditions, shares of venture capital corporations

	a mortgage (Reg. 4900(1)(j)) in respect of real property situated in Canada, where the debtor is not a connected person (beneficiary, holder or subscriber) under the governing plan of the plan trust.
	an insured mortgage (Reg. 4900(1)(j.1)) - debt secured by a mortgage or similar instrument re real or immovable property in Canada, where the debt is administered by an approved lender under the National Housing Act, and insured either under the National Housing Act, or by a corporation that offers its services to the public in Canada as an insurer of mortgages and that is approved as such by the Superintendent of Financial Institutions.
	an interest in a trust such as a mutual fund trust, a unit trust resident in Canada, certain foreign stock exchange trusts, and certain small business investment trusts, as long as they are registered investments

	annuity contracts
	warrants and rights that give the owner the right to acquire property that is a qualified investment
	call options - may be written (sold) as long as the underlying shares are held in the RRSP (covered call option). CRA indicates in Folio S3-F10-C1 (link at bottom) paragraph 1.41 that the writing of an uncovered call option may result in the plan being considered to be carrying on a business. Call options also may be purchased inside an RRSP.

put options

put options may be purchased in an RRSP, RESP, RRIF or DPSP. This was a change from the 2004 Federal Budget. For more information see the Canada Gazette 2005-09-21 (archived) and scroll down to (b) Part XLIX: Qualified Investments, which states:

New paragraph 4900(1)(e.01) provides that an option, warrant or similar right listed on a stock exchange referred to in section 3200 or 3201 is a qualified investment, provided that the underlying property is a qualified investment. The effect of this change is to enable RRSPs, RRIFs, RESPs and DPSPs to acquire publicly-listed put options and cash-settled index options, in addition to call options and warrants (which were already qualified investments under former paragraph 4900(1)(e)). This amendment applies after February 27, 2004.

The 2007 budget consolidated a number of provisions for listed securities. S. 204 (qualified investments definition, paragraph (d)) of the Income Tax Act was amended to refer to any security (other than a futures contract or other derivative instruments in respect of which the holder's risk of loss may exceed the holder's cost) that are listed on a designated stock exchange. Since s. 204 included the securities listed in 4900(1)(e.01) of the regulations, s. 4900(1)(e.01) was repealed.

put options written are not subject to qualified investment rules because no property is actually acquired at the time the option is written, thus they theoretically may be written (sold) in an RRSP. However, brokerages do not usually allow this, and CRA indicates in Folio S3-F10-C1 (link at bottom) paragraph 1.41 that the writing of a put option may result in the plan being considered to be carrying on a business.

investment-grade gold and silver bullion, coins, bars, and certificates on such investments. These must be acquired either from the producer of the investment or from a regulated financial institution. For more detail see Reg 4900(t) and (u).

Non-qualified and prohibited investments may not be held in a TFSA, RRSP, RRIF, RESP, or RDSP:

Non-qualified investments include, for example, land and general partnership units.

Prohibited investments are specifically identified in the Income Tax Act, and include property that is

	a debt of the registered plan holder/beneficiary
	shares in, an interest in, or a debt of a corporation, partnership or trust in which the holder has a significant (10% or greater) interest, or a person or partnership that does not deal at arm's length with the holder, or with a person or partnership described in (i)

When prohibited or non-qualified investments are held in a registered plan, taxes will apply. Non-qualified and prohibited investments are tax differently.

TaxTips.ca Resources

Tax Free Savings Account (TFSA) Investments

Registered Disability Savings Plans (RDSPs)

Registered Education Savings Plans (RESPs)

Canada Revenue Agency (CRA) Resources

Income Tax Folio S3-F10-C1, Qualified Investments - RRSPs, RESPs, RRIFs, RDSPs and TFSAs - see paragraphs 1.40 to 1.44 re options.

Income Tax Folio S3-F10-C2, Prohibited Investments - RRSPs, RRIFs and TFSAs

Tax Tip: See our article on how to save money on foreign exchange in an RRSP, and ask your brokerage to start allowing foreign currency balances in registered accounts, if they don't already.

Revised: April 10, 2021