Advantages of Self-Directed RRSPs

The investment industry has now grown exponentially over the last 25 years. Equity investing has become more popular than ever and investors are more knowledgeable than ever. We now have more investment choices than we have ever had and our access to information is infinite. How are investors to comprehend all their options like Mutual Funds, Exchange Traded Funds (ETFs), individual stocks, bonds, GICs, etc.

Related article: Investing basics – how to get started with investing

For these reasons, Self-Directed RRSPs have also become more popular than ever. In my opinion, if you have over $50,000 you should consider the merits of a Self-Directed RRSP. This threshold is not scientifically calculated; the threshold to consider a Self-Directed RRSP will depend on each individual investor’s personal situation.

What is a Self-Directed RRSP?

A self-directed RRSP is an account, not an investment.

Related article: The difference between accounts and investments

A Self-directed RRSP is an RRSP account that allows you to hold many different types of investments under consolidated within one single account. Some RRSP accounts only allow you to hold mutual funds. Other RRSP accounts will only have GICs. Self-directed RRSPs give you more investment freedom and control. Contrary to the name, self-directed RRSPs do not have to be self-managed. Although a do-it-yourself investor will like the idea of using a self-directed RRSP, you can also have a financial advisor or Robo-Advisor help you manage your self-directed RRSP.

Looking at the cost

Most Self-Directed RRSPs have an annual trustee fee or account fee. This fee is paid to the trustee to cover the administrative costs of overseeing the RRSP. In many cases, the trustee only makes income through these fees. Annual trustee fees range as low as $25 per year to $250 per year. In many cases, your financial institution may waive these fees under certain conditions. Self-Directed Fees are account fees that are charged over and above any investment fees like trading costs, management fees (MERs), loads, etc.

Related article: Investors need to pay attention to their investment fees

One way to look at the cost of the Self-Directed RRSP is to take the annual fee and divide it by the total portfolio balance in RRSPs. If you are thinking about a Self-Directed RRSP, the objective is to consolidate a bunch of little plans into one plan.

For example, let’s say the fee is $125 (or $133.75 with the GST) and your RRSP portfolio is $50,000. Your fee represents 0.27% of the portfolio per year. The question you have to ask yourself is “Is there value in paying 0.27% for the benefits of a Self-Directed RRSP?”.

If your portfolio is worth $500,000 then the same Self-directed RRSP fee only represents 0.027%, which is much easier to justify.

The benefits of self-directing

  1. Consolidated statements. Often investors who deal with many different companies are inundated with paperwork. Consolidating your RRSPs into a single plan makes reporting easier and you will have one statement per RRSP plan regardless of how many financial institutions you are dealing with.
  2. Product consolidation. Investors who are dealing with many different institutions tend to have too many investments and duplication within their portfolio. Self-Directed RRSPs allow investors to see the bigger picture and reduce the number of holdings in a portfolio. With so many choices available to the investor, over-diversification is a common pitfall.
  3. Easier administration. The administration for self-directed plans is centralized. Self-Directed RRSPs make it easier to trade investments particularly when you are moving money between financial institutions.
  4. Product selection. There are a number of products/investments that qualify for a Self -Directed RRSP. You can choose from conventional investments like GICs, Bonds, mutual funds, ETFs and stocks. But Self-Directed RRSPs also allow you to invest in mortgages, small business corporations, and other non-conventional investments. Self-Directed RRSPs do give you a choice and control over product selection.
  5. Diversification by company. I’ve always believed that no single company has all of the best products in the market place. In fact, according to our research, every company has good products and bad products. If you have all your investments with one company, you are likely to have good products and bad ones. One of the goals of having a Self-Directed RRSP is to try to determine the strengths of different companies (what are they really good at?) and try to select products that play to their strengths. I believe diversification by company is best done with a self-directed plan.
  6. Conversion to an RRIF. If you are nearing retirement, many experts advise that you consider consolidating your investments into fewer plans. Converting to a Self-Directed RRSP to a Self-Directed RRIF is easy and seamless.

Self Directed RRSPs for the Do-it-yourself investor

If you are ready to invest on your own, you will need to open up a trading account. All the major banks have their versions of trading account for do-it-yourself investors:
There’s also a few other options like

Personally, I am a strong advocate of Self-Directed RRSPs. In fact, I have one myself at Questrade. I like Questrade because the fees are low and you can buy ETFs with no trading cost.

The more money you have in RRSPs, the more it makes sense to Self-Direct. This list of benefits is not exhaustive and will not apply to everyone. Take the time to determine if these benefits apply to you. It will be the first step to determining if you should have a self -directed plan.

Related article: The stages of investing

Not all self-directed plans are the same. If you decide that a Self-Directed RRSP is right for you, then you should shop around and do your homework. Different companies have different annual trustee fees. Make sure you look at other fees like trading costs, transfer out fees, de-registration, partial withdrawals, etc. Also, different self-directed plans have different stipulations as to what you can invest in. Some self-directed plans allow mutual funds only as an example.

Self Directed RRSPs for those that need help

Finally, remember that having a Self-Directed RRSP does not mean you have to do everything yourself. You can still seek the advice and help of a financial advisor or through some of Canada’s Best Robo-Advisors.

Related article: Choosing Canada’s Best Robo-Advisor

A Case Study

I recently met Samantha and Jake. They had Mutual Fund RRSPs at 3 different banks:

  • Jake had a TD Bank RRSP with 4 different TD Mutual Funds
  • Jake also had an RRSP at RBC with 6 mutual funds
  • Samantha had a CIBC RRSP with one CIBC Balanced Mutual Fund
  • Samantha has a Group RRSP account at Sun Life with one Balanced Mutual Fund
  • Samantha also has an RRSP at RBC with 6 mutual funds (managed by her husband Jake)

Jake is keenly interested in investing and wants to delve into stocks and Exchange Traded Funds (ETFs). One of his options was to choose one of the banks and open a self-directed RRSP and move all the RRSPs together into one single self-directed RRSP account. He primarily works with RBC so he decided to open up a RBC Direct Investing RRSP account. He transferred the TD Banks RRSP and the RBC mutual fund RRSP in and started his do-it-yourself investing.

Samantha was not as keen to do it herself but did not like all the paper that the 5 accounts were generating. Samantha likes the idea of using a Robo-Advisor to manage her RRSP. She used Wealthsimple and they helped her set up a portfolio of ETFs after moving her three RRSP accounts to Wealthsimple.

They plan to compare their approaches to see who does better in the future.

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites and Clearpoint Benefit Solutions.

58 Responses to Advantages of Self-Directed RRSPs

  1. Hi Jim,

    Great posting. Is it possible to convert to a self directed RSP from a traditional RSP and then use the funds to invest in a franchise (ie small business)? I have been told by several financial types, the answer is no.

    If that is infact the case, what about using the self directed RSP to hold our mortgage (ie the self directed RSP lending us the money and holding the mortgage on our house)?
    I am having trouble getting in touch with people who are truly experts in dealing with anything “outside the box” as far as investments go. I get a lot of “I have never seen that done before”. Can you give advice on where we can go for solid knowledgeable advice on using self directed RSP’s?


    • Hi Rob,

      I like outside of the box thinkers! Here’s the challenge. Your question is an institutional question. You have to find a self-directed RRSP institution that can do what you are trying to accomplish. For example, someone might want to buy stocks for their RRSPs but you can’t do that at all institutions. For example, life insurance brokers and companies are not in the business of individual stocks.

      In theory, I likes shares of a small business and a mortgage on house are eligible (check out this link –

      As for the business, I think you can invest in SHARES but not sure if you can invest directly in a franchise. I think the approach you have to take is to call different self-directed RRSP carrier and ask them if they do that.

      As for the mortgage, you can definitely do that. Any self-directed company should be able to help you. I know for fact TD and RBC have done it for people I know. There are fees and your house must be Clear title to do it but it can be done.

      Good luck!

      • I did this in 1990 at 7% rates ,worked out very well. Way better then HBP ,but rates are lower and the fees the banks charge for setup are way to high now.

  2. Thanks Jim for your response. I spoke with Rev. Can. and they pointed me to the following document on their website (it320), found directly at

    This basically states in chapter 6 that to use your self directed RSP money to invest in a company, you cannot own more than 10% of the company. Seems to me to discourage small business ownership with this money.

    As for the mortgage, to use the self directed funds to hold a mortgage, you must fully own the property in order to take out the mortgage with the self directed funds

    So it looks like thinking outside the box often just puts you in yet another nested box.

    Thanks again for your response.


    • Thanks for sharing. This will help many people.
      Don’t be discouraged and keep thinking outside the box. Too few people do it!
      Good luck!

    • To Rob, YES it is possible to utilize your RRSP funds to fund your business. We specialize on just that. Email me (rrlp at danieldennie dot com).

      Looking forward to hearing from you “out of the box” thinkers!



      • Hi Rob,

        Daniel, had it right! You can use your RSPs to invest in mortgages. I am a real estate investor and money expert and this is the most popular strategy that I teach to investors all across Canada. Feel free to email me ( limor at limor dot money)

        Looking forward to helping you and others achieve stronger returns backed by the security of real estate.

        To your success,

  3. Hi Rob,
    You stated…
    “As for the mortgage, to use the self directed funds to hold a mortgage, you must fully own the property in order to take out the mortgage with the self directed funds”

    Wouldnt you be able to invest in 2nd mortgages with a self directed RRSP?

    • Hey James, you can invest in second mortgages through a company that sells them but I do not think you can write a second mortgage on your own with your RRSP funds against a property that you own.

  4. hi jim, my wife and i have a joined mortgage with RBC and also have seprate RRSP accounts with various financial institutions.
    can we open a self directed RRSP mortgage by bringing all our RRSP funds to this account and use it on our mortgage?

    • Great article

      as per self directed RRSP, You can loan it to yourself or a family member as long as you and or the family member can get a mortgage from the Bank holding your RRSP monies ( TD for instance).

      I have helped many people use their RRSP monies to invest into real estate in one way or another. You just have to know how to arrange it and what is in your best interest ( no pun intended)

  5. I have my RRSP with TD mutual funds. I do trading in US. Can I loan my RRSP amount to invest in trading?
    Could you pls. advise if this is possible.

    • To Aamir, YES it is possible to utilize your RRSP funds to fund your business. We specialize on just that. Email me (rrlp at danieldennie dot com).

      Looking forward to hearing from you “out of the box” thinkers!



  6. Self-directed RRSP’s. Opens up a whole other dimension to investing adn truly gets you out of the box. Invest in companies,stocks,lend/borrow your own mortgage, privately lend a mortgage to another’s property, joint venture projects on land, contruction financing and other lending vehicles. TD Waterhouse is ending their arm’s length Self directed RRSP mortgage product. A great product for investors, not for TD. Think outside the box ! The possibilities are there.

    • I have been through bankrupcy with my self-directed completely intact at the other end – you can’t contribute too soon before (I think 12 mnths)

  7. We will be moving to the US probably before the end of this year. We currently reside at our residence in Quebec. That property will be sold before we move.

    We have an RIF plan. I understand we cannot access that money for withdrawal until we have been away from Canada for two years. In the meantime, we want to use some of that RIF for a self-directed mortgage on a US property which we would buy and occupy as our principal residence.

    Could you direct us to a Canadian company that does allow a self-directed mortgage on a US property?

    • Hi Al

      As far as I know, no you are unable to do self directed RRSP’s outside of canada. There are other options that may work, depending on how much you have in the RIF, How much liquid you have and require.

      And FYI everyone, TD is no longer allowing Self Directed RRSPs so I suggest Olympia Trust as your Holding agent.


      • Ignore the lousy advice above. TD is very much in the SDRSP space. TD Direct Investing – Google it.
        Why can’t you do a SDRSP outside of Canada? Where you are physically is less important than if you have Canadian earned income to initially fund it.. Once established you can live anywhere – I live in the US for example and maintain a TD Direct Investing account.
        Why use some puny trust company, when you have great tools and research info on all of the big bank sites. Or extremely low fees with the likes of Questrade.

  8. I have a self-directed RLIF account with TD, and they say they do allow self-directed mortgages but only on Canada properties, and those properties must be mortgage insured to qualify. I just confirmed this today on the phone.

  9. What are the tax consequences if you lose all the value in a self-directed rrsp? Am I liable to still pay taxes on the amount that was originally put into that self directed account? For example 50,000 the original amount on the self-directed rrsp then current value is 0 and the account is closed, will the government tax me on the 50,000?

    • You are NOT liable. The law states that you can only put your RRSP money into what they consider a viable vehicle to begin with, it’s not for playing the lottery. Therefore, since you cannot control the market, the law of gravity kicks in (if you know what I mean). This is where creativity and out of the box thinking comes into the picture according to each specific case/situation.

  10. If you do a self directed plan and consolidate all your funds how does that effect the Government Insurance? Is your money protected fully?

  11. I am 80 and a widow, and have a self-directed RRIF, that helps pay the remaining mortgage on my house. Now I want to sell my house and become a renter for my remaining years. Can I use the RRIF to just pay off the remaining mortgage in one foul swoop?

  12. I am the owner of a small business and have some RRSPs. My question is, we use a line of credit and credit cards to finance our day to day operation of our business on which we pay interest. In the mean time the interest we receive from the bank on our RRRSPs is dismal. Is there a way to use my RRSPs to finance the day to day operation of the business and pay a comparable interest rate to what we are paying the banks into the RRRSPS?

    Looking forward to hearing your thought on this.

  13. Thanks for the article Jim. Canadian Western Trust is also a provider of self-directed arm’s length and non-arm’s length mortgages for many years and provide great service. As previously mentioned there are certian requirements but they are articulated in the documents.

  14. Hi Jim

    You really need to write more about this strategy. This is an outstanding way for Canadian’s with the means (more in their RRSP then they owe to the Bank) to solidify gains for retirement and ZERO out risk in their investments. You are quite correct not many money managers know about this strategy and the ones that do know are very resistant because they make nothing on this. All gains are yours. the detractors would have you believe that it is a silly strategy after all you can make 6, 7, 8% on your Diversified retirement portfolio and this will have you overweight in fixed income. I say so be it, fuzzy math aside the real return is double your interest rate plus the savings on fund management fees. For anyone tracking (and all of us should be) their real rate of return in their managed RRSP you will see in many cases the real rate of return is far less than the advertised rate of return this is the fund management fees hard at work eating away at your returns.

    In my opinion using a 3% mortgage as a basis your managed RRSP would have to produce at 8% just to match holding your own mortgage in your RRSP at 3%. let me explain, if you’re a paying the bank 3% on your mortgage the first 3% in your managed RRSP offsets to zero gain the next 3% matches your return if you are holding your own RRSP mortgage. many people will say 6%….I’m getting that so why bother, wrong you now need to add 2% to compensate for the fees the money manager is charging you whether you are making positive returns or not, year in year out. So as you can see you need an 8% return guaranteed just to match holding your own self-directed mortgage. I don’t know of anyone getting 6% over the last 5 years let alone 8%. My personal RRSP has produced a real return of around 4% (over the last 5 years) in a managed portfolio with Great West Life even though on paper we are supposedly getting an 8% return. We are on the losing end of the equation just like the banks and Mutual Fund Companies want it.

    My Wife and I did this a year and a half ago through the TD bank using both our RSP and LIRA account and although they needed to be educated on the process it went pretty smooth.

    Best of luck to all

  15. If the self directed RRSP and has a sizeable cash balance from the investments in the account, Rather than re-invest… is it possible to switch with an equivalent value of non=registered investments and withdraw the cash without consequences?? I am wondering if this would avoid the need for ACRB calculations upon selling the Non-Registered Investment or would this be considered tax avoidance or good planning????

  16. Hi Jim,

    I am a Canadian, and a RE/MAX real estate agent living in Bay Islands of Honduras, on a nice little Caribbean island called Utila. I am writing to see if you know how Canadians can use their Self-directed RSPs to invest in foreign real estate.

    In the U.S., they are allowed to use their self-directed IRAs to purchase international real estate (with some restrictions like not for personal use). These make great retirement investments in growing real estate markets (or limited inventory markets like an island). Hoping you can help?

    Thanks in advance.

  17. Hi Jim,

    My wife and I have a significant amount of RRSP holdings in Canada. Our plan is move our RRSP into a Self-Directed via one of the many custodians that Canada has to offer (Community Trust or Olympia Trust)

    The question we have, is can our self directed RRSP invest into a US LLC so that we could invest into real estate here in the US and have all the revenue generated from the US RI go back into our Canadian RRSP? Basically, we would want to form a Retirement LLC, have the RRSP invest into the Retirement LLC so that the retirement LLC can partner with other real estate investors on deals. The Retirement LLC would not be owned by us, it would be owned by our Canadian RRSP and US IRA.

    Is this too far outside of the box thinking?

    • This is beyond my expertice. I have not done this or seen this. I don’t think this is possible. You would have to check with RRSP providers/trustees to see if any of them can do this but I am pretty certain you won’t be able to.
      Good luck

  18. Hi. Great article. Here is my question. If I have shares of a private corporation within a self directed RRSP, can I sell it to my self? I want to take them out of RRSP but not pay income taxes. The proceeds from the sale would still be in an RRSP.

  19. Hi Jim,
    I too would be really interested in seeing how you responded to Jason Norman’s question. I too am thinking of doing the same, if its possible!

  20. Hi Jim: Great article. I can’t find a SDRSP trustee who will let me make an Arm’s-Length Mortgage to a property located in Quebec. Do you know any trustees that will?

  21. Hello Jim –

    Do Royal Canadian Mint “ETR’s” qualify for self directed RRSP’s ?

    I have a TFSA Investors Edge account with CIBC, and am considering moving some funds into a self directed RRSP through the same account (investors edge).


    • Hi Frank, You can’t use the money in your RSP to buy rental property, but you can use it to invest in real estate by becoming the lender. You can lend your money and make double digit returns and be secured by real estate. I am a real estate investor and money expert and this is the most popular strategy that I teach. Feel free to email me (limor at limor dot money)

      To your success,


  22. Hi Jim,

    I have a self-directed RSP account and I would like to invest in private lending. How do I invest these funds into private lending or a joint real estate purchase?

    • Hi Carisa, This is a great question! I am a real estate investor and money expert and this is the primary strategy that I teach Canadians across the country. You have to be aware of the property you are loaning they money against, the borrower and why they need the funds from you and of course the terms of the deal. Lending money can provide you with double digit returns backed by real estate. Feel free to email me (limor at limor dot money).

      To your success,

  23. I wonder how many of your readers have converted their self directed RRSP’s into RIF’s? We have personally observed that this is where the banks (in our case) have dropped the proverbial ball. Many financial organizations have not been able to get organized around or focus on decumulation. We are fairly savvy so have been able to work through the process but many retirees will have issues. The challenges we have faced range from: lack of knowledge on the part of the representative; errors in documentation; awkward management of documentation; dealing with multiple parties, none of whom appear to have real training on the decumulation side of investing; etc. etc. We are dealing with one of the big Canadian banks. We found our experience in dealing with similar funds with a pension administrator much more streamlined and professional, but with far greater limitations on how we can invest. The entire process has been a real eye opener.

  24. I have multiple Self directed RRSP’s, with TD, Royal Bank, CIBC and Sunlife

    Can I turn one of these RRSP’s into a RRIF (I am over 55 but under 70) and leave the others as RRSP’s?

    Can I continue to contribute to the self-directed’s that are RRSP’s, while withdrawing from the one that is a RRIF?


    • Yes you can turn one RRSP into a RRIF and leave the others as RRSPs.

      Yes, you can contribute to the Self Directed RRSP (as long as you have contribution room) while withdrawing from the RRIF but it kind of defeats the purpose from a tax perspective. You might want to just take less from the RRIF.

  25. Not sure why so many want to put things like mortgages etc in the RSP. Its a retirement plan, fund it early, fund it regularly and with the right ETF’s you’ll sleep much better at night.
    I’d like to see evidence how putting any other instruments outperforms even an index such as the S&P500 over say 10 yrs.

  26. I am a widow and I left my financial advisor 2 years ago when I was unable to negotiate my 1.6% fee to a lower rate. I feel that some of these advisors encourage clients to buy certain stocks that their company is keen on. I am interested in my RRSP and try to pick solid stocks. I have definitely made some mistakes but also made some good choices . I do worry about my future and ability to look after my portfolio as I age!

    • Elaine,
      There are over 90K people hanging a shingle calling themselves “financial advisors” in Canada. About 20K have the CFP designation. Less than 200 act as fiduciaries -ask yourself why is that. Do what HNW clients do, they use “fiduciary fee only planners”.
      You get what you pay for, free planing from your bank, broker, insurance person is worth about that much.
      Individual securities is probably not the best choice for yourself. If you want to go the DIY route I’d suggest ETF’s, sign up with Questrade, or the like. Buy some sector ETF’s for growth (VGT, VHT, etc), an index (VTI, SPY, etc) you are good to go.
      The industry term for needlessly moving your stocks is called “account churning”
      You are wise to know that as we age (I’m no spring chicken) we don’t make as good choices – you don’t see chess champions at 60 despite playing thousands of more games than they were when they were 40. Simplify your portfolio a Robo-advisor or even buy target date funds such as Vanguards offerings.
      Ignore the glitzy charts and graphs in the cerlox bound handout. These “advisors” aka salespeople pull out. When 95% of mutual fund managers can’t beat the index it tells you that cherry credenza behind his desk was paid for by sucker clients.
      Good luck!

  27. I have been a financial advisor for 23 years and work with Portfolio Strategies Corporation.Whenever a client invests with any of our advisors they can get consolidated statements even if they have money with RBC,Fidelity and Mackenzie.They can see this everyday online.They don’t have to pay self-directed fees of $150 a year yet get all the advantages you mention.I can sell RBC and move to Fidelity very easy except within an RRSP which is not a disadvantage b/c most advisors are not actively trading with RRSP’s as it’s a more stable/long term account.
    Product selection is really the Only reason to own a self-directed plan.If you want stocks and some of the other investment vehicles you mentioned.

  28. Hi,

    This is related to RRSPs…
    It may have been a good idea to have RRSPs many moons ago, if you knew what you were doing, but, now, the interest in lower and senior citizens (my parents) are getting wrong advice from the back upon withdrawal.
    The bank says, “we’ll make sure your withdrawals are correct…don’t worry”.
    Now, he’s overdrawn his allowable amount by $500 (lives on government cheques), and now owes $1,000 in tax penalties.
    Unless people understand RRSPs from start to finish, it’s not a gain, in my opinion.

  29. Hi,
    I am curious about the ability for self directed funds within an RDSP? It appears that the only bank allowing for any sort of real control atm is TD, but I can’t help but wonder if I am still going to be tried to be sold on the need for their advisors or products..vs. using my own knowledge and a robo advisor etc.
    Do you have any idea if this is these options are still unavailable to Rdsp accounts? If so any word on when they may be changing?
    They have been around for more than ten years and I cannot be the only investor to have reached this stage….

    • Emily, I am clarifying my previous post. (I am having issues with posting.)

      I meant to say I contacted TD Bank to open an RDSP. They told me to make an appointment with a branch which I did.I went in yesterday and the lady told me I have to contact TD Direct Investing. I called TD DI and they told me I have to go into a branch because a live person needs to see my letter from CRA. Based on my experience TD Bank service has always been poor at best. I may open my RDSP at RBC and pay the hefty mutual fund fees. At least RBC service is better.

  30. Hi Emily,

    I was just at a TD branch. The rep told me to call TD Direct Investing so I did. TD DI told me I have to go to a branch. Based on my experience TD service is poor at best. I prefer to deal with RBC and pay the hefty mutual fund fees. At least RVC service is better.

    • Hey Parsram,

      Sorry to hear about your experience. Mistakes do happen. Unfortunately, RDSP accounts still need to be opened in person as you’ve correctly identified above.

      If you’re still having problems you can email [email protected] with “retirehappy” in the subject line.

      For RRSPs, TFSAs and Cash accounts You can now open an RRSP account online:, or over the phone, in addition to opening it in person in the branch.

  31. Hi – I have a question regarding self-directed rrsp’s that i hope you can answer. I would like to know if I can open a self-directed rrsp with your company for a home I own outright, to give myself a mortgage on my home. I have the funds in my rrsp, and need them for some other purchases i need to make.

    thanks for your help.


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