How come we can use RRSP towards a share purchase plan?

Question

RRSP stands for Registered Retirement Savings Plan. So how come one is allowed to contribute towards a share purchase plan from their RRSP?
A share purchase plan cannot be considered a SAVINGS Plan because the money can go up and down. I believe(d) that SAVINGS plan means something like a SAVINGS Account

Answer 1

This is similar to your TFSA question. While the S in RRSP or TFSA stands for savings, it does not stipulate exactly what instruments you use to build up those savings. With few exceptions, you can hold any type of investment in either an RRSP or TFSA. Thus, do not think of them as savings accounts per se, but more like umbrella accounts, or plans.

It's actually the financial industry that creates these misnomers of so-called RRSPs, which are usually GICs or balanced mutual funds held inside an RRSP plan, or TFSAs, which are literally savings accounts held inside a TFSA plan. The most versatile accounts are the self-directed RRSP or TFSA accounts, usually through a discount broker, where you can purchase many different types of investments inside your registered accounts, including stocks, bonds, mutual funds, GICs, gold, etc.

Thus a share purchase plan held inside an RRSP is completely eligible and may be a sensible investment for retirement savings.