A Better Way to Invest Your RRSP Refund in 2026

The Registered Retirement Savings Plan (RRSP) contribution deadline for the 2025 tax year has passed. Canadians who contributed between January 1, 2025 and March 2, 2026 reduced their taxable income. All contributions made after the deadline will qualify for tax deductions in the 2026 tax year.

Remember, the RRSP is a special savings plan that not only helps Canadians save for retirement but also lowers tax payables. Based on published reports, the average RRSP tax refund is approximately $3,470. If you are one of the taxpayers who received a tax refund, there’s a better way to invest the money in 2026.

Since money growth in an RRSP is tax-free, you can invest the tax refund if there’s no urgent need to use it somewhere else. A $3,470 investment in TSX stocks can produce passive income or deliver substantial capital gains.

Dividend-payer

TELUS (TSX:T) is suitable for income-focused investors. The $28 billion communications and information technology company, through its President and CEO, Darren Entwistle, commits to profitable customer growth. In 2025, the combined mobility and fixed customer additions surpassed one million for the fourth consecutive year.

If you invest today, the 5G stock trades at $18.04 per share (+2% year-to-date) and pays a hefty 9% dividend. A $3,470 investment will generate nearly $78 every quarter. Entwistle said TELUS will maintain dividends at the current level as part of the capital allocation strategy.

Net income in 2025 declined 17% to $777 million compared with 2025, while free cash flow (FCF) increased 11% year-over-year to a record $2.2 billion. Doug French, Executive Vice-President and Chief Financial Officer of TELUS, is confident that the asset mix and diversified business portfolio will help deliver sustained, profitable growth and support FCF expansion.

Other business segments besides TELUS technology solutions include TELUS Health, TELUS Agriculture, and TELUS Digital. Management targets a 10% compound annual growth rate (CAGR) in FCF over three years (2026–2028). For 2026, the consolidated FCF guidance is approximately $2.5 billion, with consolidated capital expenditures decreasing by 10% to around $2.3 billion.

On executive moves, Victor Dodig, former CEO of Canadian Imperial Bank of Commerce, will assume the President and CEO post in place of Entwistle, effective July 1, 2026.

Growth play

SECURE Waste Infrastructure (TSX:SES) combines income and growth investing. While this industrial stock pays a modest 1.9% dividend, it rewards investors with massive capital gains. At $20.62 per share, SES is up 19.4% year-to-date. The total three-year return is plus-243.8%. Had you invested $3,470 in March 2023, your money would be worth $12,189 today.

This $4.5 billion company specializes in oilfield waste treatment and disposal and boasts a fully integrated waste management network. The high-demand for its vital services presents significant growth opportunities and provides revenue visibility. Furthermore, 80% of cash flows are recurring.

In Q4 2025, revenue and net income increased 10% and 56% year-over-year, respectively, to $372 million and $53 million. Its President and CEO, Allen Gransch, said the financial results reflect the resilience and quality of SECURE’s infrastructure-backed business model. He expects several long-cycle, contracted infrastructure projects to come online in 2026.

Welcome windfall

The RRSP refund is a welcome windfall for taxpayers every year. Recipients can offset tax bills further through income and growth investing. TELUS and SECURE Waste Infrastructure are solid choices for either investment strategy.

The post A Better Way to Invest Your RRSP Refund in 2026 appeared first on The Motley Fool Canada.

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More reading

• How to Build Your Own Pension Using Canadian Dividend Stocks
• Should You Buy Telus Stock at $18?
• Passive Income: How Much Do You Need to Invest to Make $1,000 Per Month?
• 5 Dividend Stocks Everyone Should Own
• The Best Stocks to Invest $1,000 in Right Now

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Secure Waste Infrastructure Corp. and TELUS. The Motley Fool has a disclosure policy.