Types of Investment Accounts

 

 

As you begin to invest your savings, it’s important to use the appropriate type of account. Investment accounts have names like RRSP, TFSA or RESP... it’s a bit confusing...so a couple of important things to keep in mind.

Number 1 - Tax benefits - Reducing the tax on your investment gains increases returns by 25-50%. Many accounts have special tax features & benefits. RRSP accounts for example provide tax credits on money put into the account, and a TFSA allows you to withdraw investment gains tax free.

Number 2 - Retirement vs Savings - Accounts like RRSP’s are designed for long term investing and retirement planning with restrictions on what can go in and out. TFSA and RESP’s are more flexible, allowing you to save for major expenses like a home or children’s education. We suggest starting with a tax free saving account...also known as a TFSA. It is a flexible way to buy ETF’s, stocks & mutual funds with tax benefits. Next look at an RRSP to start building your retirement nest egg. As always, please reach out to discuss the best approach for your situation.