Can I hold gold in my Canadian TFSA or RRSP?
- Apr 24, 2024
- loveGOLD
- 6 minute read
Some investors across Canada include gold in their portfolios for its track record of long-term value retention and resilience to inflation1. That often leads people to ask: can I hold gold in my tax-free savings account (TFSA) or registered retirement savings plan (RRSP)? The answer is yes, it is possible.
The information contained in this article is current as of the date of publishing.
Some investors across Canada include gold in their portfolios for its track record of long-term value retention and resilience to inflation1. That often leads people to ask: can I hold gold in my tax-free savings account (TFSA) or registered retirement savings plan (RRSP)? The answer is yes, it is possible.
The information contained in this article is current as of the date of publishing.
How to hold gold in your TFSA or RRSP accounts
Both investment vehicles can hold assets such as cash, mutual funds, guaranteed investment certificates (GICs), as well as gold and other precious metals such as silver.
The one key difference between gold and any other asset is that only gold bullion that is more than 99.5% pure qualifies to be held in an RRSP or TFSA2. That makes it very important to verify the purity of any gold bullion you purchase. When you buy bullion from the Royal Canadian Mint, such as our 99.99% pure Gold Maple Leaf coin, you’ll be sure your investment qualifies to be held in an RRSP or TFSA. (For silver, the minimum purity requirement is even higher at 99.9%.)
To hold gold in your RRSP or TFSA accounts, you’ll need to fund the account with an Investment Industry Regulatory Organization of Canada (IIROC) gold dealer or brokerage that services those kinds of accounts. When you purchase the gold, you’ll have to select the type of storage you prefer. Unallocated storage keeps your gold alongside other investors, without individual bars or coins being assigned to your account. Allocated storage has your specific gold bullion stored separately, meaning the specific bar or bars you bought will be the ones that you withdraw. Each comes at a cost that should be factored into your investment, including the cost of insurance.
Why some investors choose gold
The future value of any asset cannot be predicted. But gold’s performance over the years has shown stability and steady increase in value, which is why some investors often include it as part of a diverse portfolio1. Unlike stocks, bonds or exchange traded funds (ETFs), gold is a real, tangible physical asset3. This means its value is not directly tied to the performance of other financial institutions or companies. Also, its value does not historically tend to be affected by stock market volatility4. In 2022, for example, the S&P dropped by 19.4%, while the price of gold rose by 0.4%5. Gold has also been largely unaffected by inflation over the years, with its purchasing power staying relatively consistent: the amount of gold needed to buy a car in 1935 is approximately the same amount you would need to buy a standard car today6.
Because gold has historically been in demand from governments and also from a wide variety of industries — from electronics to medical technology and jewellery — it has shown consistent growth over time1. In 2022, central banks bought the most gold they’ve ever purchased7, adding more than 1,000 tonnes to their stockpiles. Gold has risen in price by 36% over the past five years, hitting a record high in April 20248.
Gold has also traditionally been highly liquid (that is, easy to sell), with the World Gold Council tracking an average of $180 billion dollars in gold changing hands every day. This is especially true of in-demand assets like the Royal Canadian Mint’s Gold Maple Leaf coins. Because we partner with banks, bullion traders and investment houses in Canada and internationally, it is relatively easy to buy and sell our bullion coins.
Remember, a safe bet is still a bet
As a commodity that historically performs well during both good and bad economic times, gold can be an attractive investment option. Yet while gold’s historical performance has been strong1, the future is inherently unpredictable and gold might not be the right choice for every investor. If you’re considering adding gold or other precious metals to your RRSP or TFSA, you should always contact a financial professional or other advisor to determine the best investment approach to meet your needs.
1- Gold's key attributes – 1. Return | World Gold Council
3- Gold Market Primer: Market size and structure | World Gold Council
4- Gold's key attributes – 2. Diversification | World Gold Council
5- How to buy gold (usatoday.com)
6- Seven things to consider when investing in precious metals (td.com)
7- 2023 Central Bank Gold Reserves Survey | World Gold Council
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