Financial well-being means having the confidence that you’ll be able to achieve your financial goals and dreams. Investing your money is one way to help reach these goals and dreams but knowing where or how can be overwhelming, especially if you’re just starting out.
The type of investment you choose should be based on your goals. The investment options will look different depending on if your goal is short-term or long-term. Below is a list of different investment options, their purposes and the benefits of each, to help get you started.
Registered Retirement Savings Plan (RRSP)
- A great way to save for retirement.
- There is a limit on how much you can contribute each year - refer to your RRSP deduction limit statement on your Notice of Assessment from the Canada Revenue Agency.
- Variety of investment options including stocks, bonds, mutual funds and rates based on your risk appetite.
- Any contribution you make, you can claim as a tax deduction on your income taxes. You won’t be taxed on this money until you withdraw it. The ideal time to withdraw these funds is in retirement when your income is lower, meaning fewer taxes you're having to pay on your income.
Registered Education Savings Plan (RESP)
- A perfect way to help you save for your child's education.
- Federal government grants and incentives are available to help your savings grow faster.
- There is a lifetime maximum of $50,000.
- Different types of plans and deposit options, working for all unique family situations.
Tax-Free Savings Account (TFSA)
- Great way to save for just about anything!
- Use to save for short- and long-term goals including weddings, emergencies, vacations, retirement and more!
- Variety of term and rate options to choose from including flexible options.
- 100% tax-free – you don't pay taxes on money earned or withdrawn.
- Maximum yearly contribution amount of $5,500. Unused contribution amounts carry over year over year.
Term Deposits & Guaranteed Investment Certificates (GICs)
- A term deposit can be used to invest in RRSP, TFSA or regular savings
- Have the potential to earn a higher interest rate than a savings account.
- Variety of rate, term and redeemable/non-redeemable options.
- Generally term deposits and are used if wanting a low to no risk investment option.
- Different interest rates for different term lengths. Typically, the longer the term the better the interest rate available.
- A mutual fund can be used to invest in RRSP, TFSA or regular savings
- Short- or long-term marketplace investment options available.
- Variety of options available for all risk appetites – low, balanced or high growth.
- Investments aren’t guaranteed. Potential for larger returns but with higher risk.
- It's recommended you work with a trusted financial advisor for advice and fund management.
Market-Linked Guaranteed Investments
- Great for investors who are seeking both security and potentially higher returns than the more familiar secure investments.
- Bridge product between term deposits and mutual funds.
- Can be invested through an RRSP, TFSA or on its own to build your wealth.
- Investment is 100% guaranteed and your return will depend on how the stocks perform during the length of your investment term.
- Variety of options with a variety of term lengths to fit your schedule and goals.
When it comes to the world of savings and investing, there are many things to know. We recommend sitting down with your financial advisor to understand your investment goals and determining which investment solutions are best suited for you.
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