Where to Put Bonds

[nihilism122]

I'm struggling with where to put bonds.  Assume all all stock portfolio.  TFSA and RRSP are maxed.  RRSP is all VTI and SCHD in USD.  TFSA is a mix of VDY, ZRE, and VTI.  Taxable account is a mix of Canadian and global stocks - mostly VCN and VXC.  I want to start a bond allocation and I can't decide where to put it.  I don't want it in my taxable while I am working/in a high tax bracket but I also don't want to use valuable TFSA/RRSP room on bonds.  Any ideas?

[GuitarStv]

Either eat the taxes or shelter them in a TFSA or RRSP.  Those are your only options that I'm aware of.

[Lews Therin]

RRSP is not valuable space.

You want your Bonds there.

[rocketpj]

If you have never bought a home and plan to do so then the FHSA is the place for it - tax sheltered on deposit and on withdrawal (with conditions).

Too late for me but I'm encouraging my kids to do it.

[Heckler]

Bonds in RSP if you aren’t a VGRO or VBAL everywhere guy.  You have contribution room though- it’s only January!  Or did you already contribute the full RSP?  Buy bond ETF with 2025 RSP contributions.

Or/And sell VTI in RSP to buy bond ETF to your new asset allocation or in stages as you contribute to non registered, then buy new VUN in non registered and claim the dividend withholding tax at tax time (assuming that’s why you own VTI in RSP).

The catch is the old USD-CAD conversion should done if you will eventually spend the bonds in $Cad in the future (and therefore hold Canadian fixed income).  It’s likely more cost effective to do one large Norbert’s gambit.

I’m in almost the same boat with maxed RSP. It’s hard to get off the VTI showing returns in $Cad addiction, that’s for sure.   This is where VGRO in all accounts shines.

[Heckler]

https://canadianportfoliomanagerblog.com/asset-location-part-1-key-concepts/

https://canadianportfoliomanagerblog.com/foreign-withholding-tax-u-s-equity-etfs/