What type of account does an RRSP represent in Canada?

An RRSP, or Registered Retirement Savings Plan, is classified as a tax-advantaged retirement savings account in Canada. The key feature of an RRSP is that it allows individuals to save for retirement while providing immediate tax benefits. Contributions to an RRSP can be deducted from taxable income, which reduces the amount of income tax owed in the year the contributions are made. This tax-deferred growth means that the investments in the account can grow without being taxed until the funds are withdrawn, typically during retirement, when individuals may be in a lower tax bracket.

The other account types have distinct characteristics that do not apply to an RRSP. For instance, a tax-free savings account does not provide the same retirement-specific advantages and allows tax-free withdrawals anytime, whereas the RRSP is primarily focused on long-term retirement savings. A checking account generally deals with daily transactions and has no tax benefits associated with it. Lastly, a government bond investment refers to a specific type of security, which is not inherently linked to the structural or fiscal advantages offered by an RRSP.