Most banks offer good RRSP options, its just that so many people choose to go with the safe and boring GICs or the like. If you want better returns, you need to be willing to accept a higher degree of risk. That means investing in money market funds or mutual funds and the like, which all the major banks offer as RRSPs. In fact, some of the best performing funds out there are run by major banks. GICs and such are not a ripoff either. they offer minimal to near zero risk, the trade off is lower returns. If you cannot afford the chance of having your portfolio decrease in value, ie: you will need to use the full value of the investment in a short time frame, then these are the vehicle you should be in. If you can ride out a weak market, then the average higher returns of the other choices will make you more money in the end. The key is to not bail out when its down.

The way I see RRSPs benifiting me is not so much that I will likely see a lower tax rate on the income, but it allows me to hold onto the tax portion of the income and use it to earn more money for me. Basically, I'm adding an additional 30% into my investment. Essentially, I'm reinvesting my refund rather than treating it as a bonus. That additional money will grow for me and end up as an even greater amount. Yes I will have to pay taxes on all of that money eventually, but I will still have a lot more net dollars.

Besides, why let the government have your money and squander it as they so frequently do. Keep it for yourself and squander it on your own ventures.

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I know only what Ive heard from older people who have spent years putting money in RRSP's and have had to pay enormous amounts in taxes when they've needed larger sums of money.Id hate to have my car die when im older and need to take money to pay for it only to add 40% to the cost for taxes.Just makes very little sense.I dont even like giving the goverment gst and pst.Last thing I want to give them is the money that I spent years squandering away like a chipmunk.JMO.Clint

If they're paying that much in taxes because they had to draw out a large sum, then they failed to plan ahead. Once you are into retirement, you should start to move small amounts out of the RRSPs regularly even if you don't need it. You can reinvest it in a non registered fund. That way you minimize the impact of the taxes since it does not bump your income into a higher tax rate. In a few years you will have a nice sum outside of your RRSP that you can draw on with no further tax penalty. Plus, you have to remember that you have not paid any taxes on any of that money for the entire time it has been in the RRSP. Its not that you will never pay taxes on it, the plan is that you will pay less taxes on it and you get to have all of your money to invest rather than just the aftertax portion.

If you have an income that is sufficent to push you into the highest tax rate all ready, then you can shut up and quit griping about your taxes since you have way more money than me :mrgreen:

If you plan to tap into the funds prior to retirement, then an RRSP is perhaps not the best place to invest; or at least not all of your savings.

I personally think GIC's are not for me because of the following:
1. The rates are usually not that high, plus you end up having to pay taxes on your gains even though you havn't touched it.
2. Depending on where you live (Alberta for me) the GIC's may not even offset inflation rates. Which effectively nulifies or makes your gains negligible. Plus you still have to worry about paying taxes opn those gains.
3. Many institutions try to get you to lock into a term
4. It adds to your taxable income at the end of the year whilst RRSP's reduce it (or at least defers it for later).

Although I haven't reviewed the restrictions on the new savings plan, I wonder if you open the savings account first and then invest it in a GIc if the gains end up being tax free... then my issues above are no longer applicable... For me I'd still put my money in Canadian real estate.
So far it seems the application of this new plan is endless!

Reggie

Don't ever buy GIC's. Banks laugh at you after you've purchased a GIC. They are the biggest ripoff on the market. End of story.

This new "tax free" savings is kind of a joke as well.

Actually it sounds like it can potentially be a huge money saver. Say for example you already are investing in stocks, mutual funds etc (not GIC's as I agree with Albert they're a ripoff) you can put the money through this savings account and then do the same thing. Now the growth is tax free. And you can also roll it over as the years go by. ie. for a couple years you don't start one but in the 2nd year you get a lump sum of money (i.e. a 10k bonus from work etc.) and if you decide to invest it you can use that vehicle to enjoy tax free growth. Of course if one doesn't do any investing at all it is useless. I'm still waiting for the Conservatives other promise of deferred capital gains though....