Investment Vehicles

Registered Retirement Savings Plan (RRSP)

This is a personal savings plan registered with the Canadian federal government allowing you to save for future means. Contributions to this investment portfolio are tax deductible and any income gained is tax exempt until it is taken out of the plan.

Registered Retirement Income Funds (RRIF)

A tax-deferred retirement plan is used to generate income from your RRSP. As your money continues to grow tax-free in your RRSP, you will eventually be required to convert to a retirement income source by the end of the year you turn 71. The RRIF allows your investments to continue growing, tax deferred. The only difference between the RRSP and RRIF is a minimum mandatory withdrawal each year.

Tax-Free Savings Account (TFSA)

This registered personal savings account was first introduced in 2008. A TFSA allows all income earned in the account to be tax-free, even when it is withdrawn. It is different from a RRSP as contributions to a TFSA are not deductible for income tax purposes. The TFSA can be used to save for both short-term and long-term goals and has no requirement to convert to a retirement income source (i.e. RRIF).

Click here to calculate the benefits you can receive from using a Tax-Free Savings Account.

Registered Education Savings Plan (RESP)

A registered tax-sheltered plan that helps you save for a child’s post-secondary education. Although contributions are not deductible for income tax purposes, the income earned in the plan are tax-deferred until it is withdrawn by the beneficiary. The beneficiary (the student) is usually at the lowest tax bracket and therefore minimizes the taxes to be paid. Contributions to the plan can be made up to 31 years from its onset.

Payout Annuities

Much like a pension, these investment products pay a set monthly income for a pre-determined period of time. The insurer makes guaranteed regular income payments composed of both interest and a return of principal to the investor in exchange for a single lump sum investment. Annuities are ideal for those looking to invest for retirement and other long-term goals. You can choose between term-certain annuities that guarantees a set monthly income for as many years as you want, variable annuities with its performance tied in to the stock market or life annuities with a set monthly income for life until you die. Add-on options are available on life annuities that can help benefit your spouse or even increase your income to keep up with rising costs.

Guaranteed Investment Certificates (GICs)

A deposit investment security that provides a low-risk fixed rate of return. Any amount that you deposit is guaranteed to you at the end of the set investment period, usually several months or years plus any interest earned. Registered GICs can be included with your RRSPs, RRIFs and TFSAs.

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