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How to Use Your RRSP or TFSA to Invest in Private Markets

For most Canadians, the RRSP and TFSA are cornerstones of long-term financial planning. But many investors don’t realize that they can also be used to access private markets—including private mortgage funds and other alternative investments.

Apoorva Bordoloi

07 Jul 2025 — 3 min read

Photo by osamu nakazawa / Unsplash

Introduction: A Hidden Path Within Your Registered Account

For most Canadians, the RRSP and TFSA are cornerstones of long-term financial planning. These registered accounts are marketed as tax-efficient vehicles to invest in mutual funds, ETFs, and public securities. But many investors don’t realize that they can also be used to access private markets—including private mortgage funds and other alternative investments.

In a world of low yields, rising inflation, and market volatility, the ability to hold income-producing alternatives in a tax-sheltered account can be a game-changer.

RRSP vs. TFSA: A Quick Primer

RRSP (Registered Retirement Savings Plan): Contributions are tax-deductible, and growth is tax-deferred until withdrawal. Designed for retirement savings.
TFSA (Tax-Free Savings Account): Contributions are not tax-deductible, but growth and withdrawals are completely tax-free. Useful for both short- and long-term goals.

Both accounts allow investors to grow wealth efficiently, especially when used strategically.

What Are Private Market Investments?

Private market investments refer to financial assets not traded on public exchanges. These can include:

Private equity or venture capital
Private real estate or infrastructure funds
Mortgage Investment Corporations (MICs)
Private lending platforms or direct debt placements

How to Hold Private Investments in Your RRSP or TFSA

The process involves working with a self-directed registered plan provider. These are trust companies or financial institutions that specialize in holding non-traditional assets.

Open a self-directed RRSP or TFSA with a qualified trust company (e.g. Olympia Trust, Computershare).
Work with an Exempt Market Dealer like Morex Asset Management to access private investments such as a MIC.
Complete subscription documents and transfer funds into your registered account.
The registered plan trustee holds the investment, and you receive quarterly or annual income tax-deferred or tax-free, depending on the account.

Why Use Your RRSP or TFSA for Private Lending?

Tax Efficiency: Income from a MIC (often 8–10%) is typically taxed at your marginal rate. Holding it in an RRSP or TFSA defers or eliminates that tax liability.
Diversification: Most registered portfolios are heavily concentrated in equities and bonds. Private lending introduces non-correlated, asset-backed income.
Stable Yield: Many Canadians struggle to find a stable income in their TFSA or RRSP. MICs and other alternatives can provide this consistency.
Protection Against Volatility: Because MICs are not traded daily, they’re not subject to market panic and short-term price swings.

Are There Rules or Restrictions?

Eligibility: Not all private investments are RRSP or TFSA eligible. Check the issuer’s documentation. Morex MICs are eligible.
Qualified Trusts Only: You must use a trustee that is approved by the CRA to hold such investments.
Accreditation: Many private offerings are available only to accredited investors or under certain exemptions.
Due Diligence: Private investments are not covered by deposit insurance and carry risks. Work with a licensed dealer to ensure suitability.

A Real-World Example: MICs in a TFSA

Sarah, a 45-year-old dentist in Ontario, has $70,000 in her TFSA—mostly in a bond ETF yielding 3.2%. She decides to move $40,000 into a self-directed TFSA holding a Morex MIC targeting 9.0% annual income.

This shift boosts her tax-free income by more than double, without increasing her risk profile significantly, since the MIC holds first and second mortgages with low LTV in the GTA.

Over a 10-year period, her TFSA could accumulate over $37,000 more than it would have with the ETF alone, thanks to compound growth and zero taxes on gains.*

Final Thoughts

Your RRSP or TFSA is more than a holding tank for mutual funds. It’s a strategic vehicle for building resilient income and diversified wealth.

By adding private market investments like Morex MICs to these accounts, especially under professional guidance, you can enhance your portfolio’s performance while still maintaining tax efficiency.

As with any investment strategy, success lies in planning, prudence, and partnering with experienced professionals.

Disclaimer

This article is for informational and educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities, including shares of the Morex MIC Fund. Any investment decision should be made only after reviewing the offering memorandum and consulting with a licensed financial advisor. The Morex MIC Fund is available only to eligible or accredited investors under applicable Canadian securities laws.

Mortgage investing involves risks, including the potential loss of capital, limited liquidity, and may not be suitable for all investors. Investments in a MIC are not guaranteed or insured.

*Returns in hypothetical scenarios are for illustrative purposes only and do not guarantee future results.

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