When it comes to saving for retirement, Canadians often ask, “Can you have more than one RRSP?” The answer is yes—you can hold multiple Registered Retirement Savings Plans (RRSPs) at the same time. However, while there are no restrictions on the number of RRSP accounts you can open, there are a few important factors to consider.
If you are still learning the basics, start with our guide to what an RRSP is. If your bigger question is whether to prioritize an RRSP or TFSA, our TFSA vs RRSP guide gives a clearer decision framework.
Why Have Multiple RRSPs?
Here are some reasons why having more than one RRSP might make sense:
1. Diversifying Financial Institutions
By opening RRSP accounts with different banks or investment platforms, you can take advantage of varying investment options, interest rates, and account features. For example, one institution might offer better GIC rates, while another provides low-fee or commission free ETFs.
2. Separating Investment Goals
Some people prefer to keep their RRSP investments organized by purpose. For instance, you might have one RRSP for conservative investments like GICs and another for higher-risk, growth-oriented investments like equities or ETFs.
3. Employer-Sponsored RRSPs
If your employer offers a group RRSP as part of your benefits package, you can contribute to it while maintaining a personal RRSP for other investments. Employer-sponsored RRSPs often come with perks like matching contributions, making them an excellent option for retirement savings.
Having a second personal RRSP gives you the flexibility to manage your investments according to your own strategy. If you change employers, you can easily transfer your assets into your personal RRSP, simplifying your finances. This approach prevents you from leaving behind a trail of Group RRSPs, reducing complexity and making it easier to stay organized.
What to Keep in Mind
Although multiple RRSPs can offer flexibility, they also come with a few challenges:
1. Contribution Limits
Your RRSP contribution limit remains the same regardless of the number of accounts you hold. The annual contribution limit is based on 18% of your earned income (up to the annual maximum set by the government). Exceeding this limit could result in penalties. It’s important to make sure you don’t exceed this across your accounts.
2. Management Complexity
Keeping track of multiple RRSP accounts can be cumbersome. You’ll need to stay organized to ensure you don’t exceed your contribution room and to monitor the performance of each account.
3. Fees
Having several accounts might mean paying multiple account maintenance or trading fees. It’s worth comparing costs to avoid unnecessary expenses.
Fees matter because they compound against you. Before keeping multiple RRSPs open, compare account fees, trading fees, and fund MERs. Our guide to MER explains how small annual fees can quietly reduce long-term returns.
The Bottom Line
Yes, you can have more than one RRSP, and in some cases, it can even be a smart strategy. However, it’s crucial to manage your accounts wisely, stay within your contribution limits, and consider consolidating accounts when it makes sense. Always evaluate your financial goals and consult with a professional if you’re unsure about the best strategy for your retirement savings.
By understanding the pros and cons of holding multiple RRSPs, you can make informed decisions to maximize your retirement savings.
