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RSP Generation LP Calculator

  1. Enter "Input" fields
  2. Adjust "Final Instalment Payment Options" if necessary
  3. Click "View Report"

RSP Generation LP Calculator Definitions

Province of residence
The province of residence is used to determine your income tax rate and associated refund.
Unused RRSP contribution limit
Enter your cumulative unused RRSP contribution amount. For more information visit: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/cntrbtng/nnsd-eng.html
Estimated Investor's Income
Enter your estimated taxable income. This will be used to determine your effective tax rate.
GIC Investment amount
Enter the amount you wish to invest. Allowable amounts are a minimum of $20,000 up to the lesser of the "Estimated Investor's taxable income" or the "Unused RRSP contribution limit". This investment (GIC) and all corresponding tax consequences are expressed on a stand-alone basis.
GIC expected rate of return
Enter your estimated rate of return of the investment (GIC). Rate is compounded annually. For illustrative purposes only.
Effective tax rate
The rate which will be applied to calculate a potential refund. Determined by the Investor's province of residency and estimated taxable income.
First Instalment
50% of the value of the investment (GIC). Due on acquisition. 100% financing may be available to qualified Investors.
Tax refund
Based on the Investor's province of residency, RRSP contribution (Investment Amount), and Investor's estimated taxable income. The assumption is made that the Investor is current in their tax contributions and or instalments.
Funding requirement
Total up-front cost to Investor in year one assuming the tax refund calculated.
Final Instalment
Equal to 50% of value of the investment (GIC), plus a financial services fee. The final instalment is due 7 business days before the maturity of the GIC.
Financial services fee
The financial services fee is an amount equal to 50% of the GIC's issue price multiplied by approximately 3.422% per annum, provided that the aggregate financial services fee due in total never exceeds 20% of the GIC's issue price for the period from the issue date to and including the maturity date.
Funds withdrawn from SD RRSP
If the Investor does not pay the entire final instalment 7 business days prior to maturity of the GIC, GICs in value of the amount outstanding will be withdrawn from the Investor's SD RRSP to pay the balance owing. Whenever funds are withdrawn from the Investor's SD RRSP, a withholding tax must be applied by the Trust Agent equal to a grossed up 30% (31% in Quebec) of the amount withdrawn from the SD RRSP. The distribution from the SD RRSP must be added to the Investor's income in the year of withdrawal. The withholding tax paid on the distribution offsets the tax payable from the income inclusion. Additional tax may be payable in the year of withdrawal, if the tax payable as a result of the income inclusion is greater than the amount withheld.
Investor's own resources
Enter the amount you wish to pay of the final instalment with your own resources. Allowable amounts are a minimum of $0 up to the total amount of the final instalment. The more you pay with your own funds the higher the IRR on your investment and the more funds you will have available for reinvestment in your RRSP at maturity.
Net Gain (Loss) on Investment
The sum of all cash flows, both positive and negative.
IRR (Internal Rate of Return)
The investment return is assumed to be constant throughout the investment period and all cash flows are assumed to be reinvested within the SD RRSP at the same annualized investment rate.
Break-even investment return
The break-even investment return is the rate of return on the investment (GIC) that would result in no gain or loss on the overall investment. This rate may not be applicable (e.g. calculated as a negative amount) where the Investors cash cost is equal to or greater than the principal protected amount of the GIC.