Top-Up RRSP Loan

The Top-up RRSP loan strategy is where you borrow a modest amount that is completely paid off within a year, before next year’s RRSP contribution deadline.



  • You are in a 40% tax bracket and you have $3,000 available to contribute into your RRSP by the deadline date of March 3, 2014.
  • You top up your contributions with a $7,000 loan and put a total of $10,000 into your RRSP
  • This would generate a $4,000 refund ($10,000 x 40% = $4,000)
  • The $4,000 refund can almost immediately reduce the $7,000 loan to $3,000, which is paid off before the following March.
  • The $10,000 starts compounding in your RRSP right away, and you won’t be tempted to blow the refund on things you don’t really need


This top-up RRSP loan strategy should only be implemented after consulting with your Financial Planner. Everyone’s situation is unique, and there are many things to consider when making RRSP contributions and borrowing money.

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