Investment Accounts and Products

Benefits of TFSAs include:

• Pay no taxes on any investment earnings
• Contribute even if you’re retired or not employed
• Contribute for as long as you want to⁸
• Use a TFSA to save for anything while also saving for retirement in an RRSP

Benefits of RRSPs include:

• Your annual contribution can be deducted from your gross income, reducing the amount of income tax you pay that year.
• The income you earn is sheltered from tax, allowing it to grow faster. By the time you retire and withdraw funds, you will likely be in a lower tax bracket.
• Withdraw money to buy your first home¹ or pay for your or your spouse’s education², without penalty—providing it’s repaid within the specified time.

Benefits of FHSAs include:

• Use it to save up to $40,000 for your first home
• Contribute tax-free for up to 15 years
• Carry forward any unused contribution room from prior years for as long as you have the account
• Pay no taxes on investment earnings

Benefits of an RESP include:

• Tax Sheltered Growth—Earnings within an RESP are not taxed. When the funds are taken out for education, withdrawals are taxed in the student’s hands, often resulting in little or no tax.
• Grow your savings faster with the Canada Education Savings Grant (CESG)³, Canada Learning Bond (CLB)⁴, and other government incentives. See RESP Grants and Bonds.
• Built-In Flexibility—if the child doesn’t pursue post-secondary education, you may be able to choose a new beneficiary. Or, if he or she wants to travel first, you have 35 years to use the funds.

Benefits of RDSPs include:

• Defer Tax on Investment Income—Taxes on investment income and capital gains earned are deferred while in the RDSP, helping the plan to grow faster.
• Use Funds for anything—Funds can be withdrawn for any purpose that benefits the person with the disability. Plus, family and friends can contribute to the plan with the written consent of the plan holder.
• The Federal Government will match your contributions (limits apply⁵) up to $70,000 in Canada Disability Savings Grants and low-income families may qualify for additional help of up to $20,000 in Canada Disability Savings Bonds.

Benefits of RRIFs include:

• Similar to an RRSP, your money continues to grow tax-sheltered in a RRIF
• Decide when and how much to withdraw as long as you take the required minimum amount.
• When you pass away, RRIF assets can transfer to your spouse on a tax-free basis

Benefits of GICs include:

• Competitive interest rates, guaranteed for the full term of the investment
• Flexible investment terms–ranging from one day to three, five, seven and ten years
• Hold as a non-registered investment or within a registered account
• Choice of interest payment frequencies
• Canada Deposit Insurance Corporation (CDIC) coverage

Benefits of mutual funds include:

• Professionally managed— a professional money manager makes the investment decisions and monitors the markets, so you don't have to.
• Access to Markets—Get convenient access to global capital markets, including equities and fixed Income.
• Investment Variety—Mutual funds invest in a variety of equities, bonds and other holdings, giving you a balanced and diversified portfolio.
• Easy to Invest—You can have a professionally managed portfolio for an initial investment of just $500

Stocks

If you are focused on building your wealth , are comfortable with fluctuating returns and want the potential for greater long-term earnings compared to bonds and cash investments, then including stocks in your investment portfolio could be right for you. Stocks can also help you create a balanced portfolio when combined with fixed-income investments such as bonds as well as provide you with tax-efficient dividend income.

Bonds

If you are focused on capital preservation or need income from your investments, then bonds may make sense for you. Including bonds in your investment portfolio is ideal if you want a relatively secure, low-risk investment, if you need regular investment income, or you are looking to diversify your overall portfolio to reduce risk.

Benefits of ETFs include:

• Low fees and No Minimums - With lower fees than most mutual funds and no investment minimums, ETFs are an affordable way to invest.
• Less Risk through Diversification - With an ETF, you can access a variety of asset types, sectors and indices, which spreads out investment risk.
• ETFs can be bought and sold on major exchanges, just like stocks.