In this article:
Overview
The RRSP Boost is a feature that helps you use our portfolio line of credit to borrow funds specifically for an RRSP contribution. By contributing more now, you can maximize your potential tax refund and keep your money growing tax-deferred.
The RRSP Boost guides you through using your eligible investments as collateral to borrow money for your RRSP. Instead of a traditional bank loan with fixed payments, this feature uses a flexible line of credit, allowing you to repay the balance on your own schedule.
Any money you contribute to your RRSP is deducted from your annual income, which can lead to savings at tax time.
Eligibility
To use the RRSP Boost, you must meet the following criteria:
- Have available RRSP contribution room.
- Hold eligible assets in a non-registered account or TFSA to serve as collateral.
How to use the RRSP Boost
You can access the RRSP Boost flow directly within the Wealthsimple app:
- Log in to the Wealthsimple app
- Tap your RRSP account
- Tap the Boost your RRSP tile
- Open a portfolio line of credit if you haven't already
- Calculate your RRSP boost by confirming your details
- Tap Next
- Confirm your maximum RRSP Boost amount
- Tap Boost by $[Maximum amount]
- Enter the amount that you'd like to borrow
- Choose the RRSP account where you'd like to transfer the amount
- Tap the right arrow
- Confirm your transfer details
- Tap Submit
Interest rates and fees
The interest rate for your portfolio line of credit depends on your tier. Rates are based on the Wealthsimple CAD Prime rate.
| Tier | Rate |
| Core | Prime + 0.5% |
| Premium | Prime + 0% |
| Generation | Prime - 0.5% |
Interest is calculated daily on your outstanding balance and charged monthly.
Frequently asked questions
Is the RRSP Boost a new type of account?
No. It's a feature built into our portfolio line of credit product. It simply automates the process of borrowing from your portfolio line of credit to fund an RRSP contribution.
What are the risks of borrowing to invest?
There are two main risks to keep in mind:
- Growth versus cost: Interest will accrue on your loan until it's repaid. If your RRSP investment returns are lower than the interest you pay, the boost may cost more than it earns over time.
- Collateral risk: Because the loan is secured by your other investments, a significant drop in the market value of those assets could lead to a margin call, requiring you to add more funds or pay down the loan immediately.
How do I repay the borrowed amount?
You can repay the loan at any time through the app using available cash in your Wealthsimple accounts or by linking an external bank account. There are no penalties for early repayment.
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