Personal Finance

RRSP: Mutual Funds vs GIC

  • Last Updated:
  • May 14th, 2015 8:54 pm
Sep 8, 2013
79 posts

RRSP: Mutual Funds vs GIC

Hi everyone,

I have RRSP as company's benefit and need to choose type of it. Which one do you prefer for small amounts < 5k these days?

Thank you!
9 replies
Deal Addict
Mar 8, 2013
2812 posts
You mean that your company is matching your contribution with their money up to a certain amount? Can you transfer it out after a period of time?
Deal Expert
Aug 22, 2011
38233 posts
Center of Universe
GIC, generally has lower ROI, no fees and a simple place to park your money and not worry.
MF, has a greater ROI (depending on risk and portfolio), but has MER fees ranging from 0.1%- 3% etc...
Deal Fanatic
Oct 7, 2007
9277 posts
If it were me, I'd choose the GIC option because you will not lose any of your principal and you know exactly how much interest you will get. But that's just me.
Sr. Member
May 22, 2004
695 posts
You're not gonna make any money on GICs.

Post the list of mutual funds available and how much the company will match your contribution
Deal Fanatic
Aug 5, 2006
8897 posts
Global Village
Consider a balanced fund with under 1% in fees (mer) if available. They tend to be well diversified, I personally have had a good experience with the Mawer balanced fund, if it's available to you I highly recommend it. Like others have said these are only effective as longer-term investments, you will see corresponding ups and downs to the markets.
Jr. Member
Jul 28, 2014
123 posts
Toronto, ON
As previously mentioned, post a list of the funds that they are making available to you and how much they will look to match your contributions by, ex. $1 for $1 up to 6% contributed, etc.
Deal Addict
User avatar
Dec 27, 2011
3610 posts
I choose Money Market which has the lowest MER and transfer it out into my own personal RRSP as many times a year as I’m allowed without incurring a fee.
Sep 8, 2013
79 posts
Thank you for the responds!

I can't choose other bank it should be RBC as part of the benefits. I created RRSP account as RBC High Interest eSavings 0.800% because I have no idea what to choose RBC GIC or RBC Mutual Funds.
Can switch to GIC or Mutual Funds anytime. I was told that all available portfolios I can find on RBC site.

Mutual Funds:

RBC Select Portfolios – Built exclusively using RBC Funds and PH&N Funds, two award-winning fund families.

Very Conservative Portfolio ... f209_e.pdf
Conservative Portfolio ... f461_e.pdf
Balanced Portfolio ... f460_e.pdf
Growth Portfolio ... f459_e.pdf
Aggressive Growth Portfolio ... f592_e.pdf

RBC Select Choices Portfolios – Brings together some of Canada’s leading and most respected money managers in one convenient portfolio.

Conservative Portfolio ... f566_e.pdf
Balanced Portfolio ... f567_e.pdf
Growth Portfolio ... f568_e.pdf
Aggressive Growth Portfolio ... f569_e.pdf
Deal Addict
Mar 8, 2013
2812 posts
the issue is not so much what mutual funds or GICs are available to you now, but what are your options when you have a substantial amount invested in the future. If you want to invest in GICs, then it is straight forward that you want to get the highest rate, subject in CDIC insurance or equivalent. That's why it is important to tell us for what period you are locked in and what the transfer out fees may be. Similarly, even though a particular fund has performed well in the past, things may change in the future - the hotshot manager may make bad decisions or leave, the MER may be increased, etc. The bank is counting on people's inertia - keep investing without exploring alternatives. So my advice is to accept your employer's contributions, but don't lock yourself in until you understand your alternavies.