# Need advise regarding RRSP



## asifakhtar (Nov 29, 2015)

Hi,
I am a Canadian citizen and I am planing to buy home first time and I need advise regarding RRSP. I have never invested in RRSP and my intention is to invest money in RRSP with TD Bank.

Please note while investing in RRSP,* my intention is to avoid interest and use that amount towards my home*. I have an account in TD but I don't know which RRSP's account will be suitable in my situation(Avoid interest and use that money/withdraw when I purchase my home and avoid monthly account fees). 

Thanks


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## OptsyEagle (Nov 29, 2009)

You will most likely just want to invest it into a daily interest savings account, inside the RRSP, so that you can access it whenever you buy a house without penalty. Unfortuneately the interest rates these days are usually below 1% annually but your real gain will be the tax deduction you get when you declare the RRSP contribution on this years or future years tax returns.

Just make sure the money is in the RRSP for at least 90 days before you make a home buyers plan withdrawal or it won't work as a home buyers plan and you will get taxed on the withdrawal.


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## asifakhtar (Nov 29, 2015)

OptsyEagle said:


> You will most likely just want to invest it into a daily interest savings account, inside the RRSP, so that you can access it whenever you buy a house without penalty. Unfortuneately the interest rates these days are usually below 1% annually but your real gain will be the tax deduction you get when you declare the RRSP contribution on this years or future years tax returns.
> 
> Just make sure the money is in the RRSP for at least 90 days before you make a home buyers plan withdrawal or it won't work as a home buyers plan and you will get taxed on the withdrawal.


I think you missed my point of avoiding interest(*Please note while investing in RRSP, my intention is to avoid interest and use that amount towards my home.*)


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## OptsyEagle (Nov 29, 2009)

Then ask them to put it into daily interest in one of their many accounts that currently don't pay anything and will not until rates rise at least 3 full percentage points. I am assuming that it will not be in there very long.

Now the point you missed making is WHY you don't want any interest since that is not the norm. If it is for religious reasons you may need to think about the required repayment of the rrsp home buyers withdraw. Where are you going to put this over the long term and not end up with any interest.

The other option of course is to not make any repayments and pay the tax owed on each years repayment requirement.


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## asifakhtar (Nov 29, 2015)

OptsyEagle said:


> Then ask them to put it into daily interest in one of their many accounts that currently don't pay anything and will not until rates rise at least 3 full percentage points. I am assuming that it will not be in there very long.
> 
> Now the point you missed making is WHY you don't want any interest since that is not the norm. If it is for religious reasons you may need to think about the required repayment of the rrsp home buyers withdraw. Where are you going to put this over the long term and not end up with any interest.
> 
> The other option of course is to not make any repayments and pay the tax owed on each years repayment requirement.


Yes avoiding interest is for religious reasons.


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## scorpion_ca (Nov 3, 2014)

How much is your yearly income? If it is less than $50k a year, it's better to save in TFSA or in chequing account as you are planning to buy a house. If it is more than $50k a year, it's better to save in RSP as cash instead of investing but talk with TD. 

If you want to contribute to RSP for investing and growing your money but don't want to use it for home buying, you could invest in dividend stock or REIT. 

Are you planning to buy a house by paying full amount in cash? If you don't pay full amount in cash, you will pay interest on your mortgage. Interest receive and payment both are haram. You might find some Islamic financing for your mortgage. I know someone who took this financing option but has a doubt about this scheme.


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## Moneytoo (Mar 26, 2014)

http://www.moneygeek.ca/weblog/2015/06/29/introducing-shariah-portfolios/


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## asifakhtar (Nov 29, 2015)

scorpion_ca said:


> How much is your yearly income? If it is less than $50k a year, it's better to save in TFSA or in chequing account as you are planning to buy a house. If it is more than $50k a year, it's better to save in RSP as cash instead of investing but talk with TD.
> 
> If you want to contribute to RSP for investing and growing your money but don't want to use it for home buying, you could invest in dividend stock or REIT.
> 
> Are you planning to buy a house by paying full amount in cash? If you don't pay full amount in cash, you will pay interest on your mortgage. Interest receive and payment both are haram. You might find some Islamic financing for your mortgage. I know someone who took this financing option but has a doubt about this scheme.


I am Muslim and intention is to pay full in cash and avoid interest. My income is more than $50k. I am also looking for Islamic financing option in case I can`t manage the whole amount.


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