High Interest Savings Account:
- The bank pays you interest on your deposits.
- The rate of interest changes
- The interest is slightly higher than a regular savings account.
- This is a very safe kind of account.
- You could use it to save money for the short, medium or long term. You can withdraw this money whenever you like.
- It means that you lend your money to a government or a corporation.
- They pay you interest on your loan over a period of time called a term.
- When the term is over, you get all of your money back.
- Government bonds in Canada are very safe.
- Corporate bonds hold some risk.
- You could use bonds to save for medium or long-term goals.
- You buy shares in a business that is publicly traded on the stock market.
- This can be very risky, because you can lose all of your investment.
- Some people buy stocks to try to make money fast.
- It is less risky to hold onto stocks for medium and long-term savings goals.
Registered Retirement Savings Plan (RRSPs):
- This is a way of saving on taxes while you save for retirement
- When you put money into an RRSP, you can invest it as you choose, in savings accounts, GICs, stocks, and so on.
- This is a very useful way to save if you are working and paying taxes.
- It is not as useful if you are living on a very low income or collecting social assistance.
- You can open an RRSP at a bank, credit union, or investment management company.
Tax-Free Savings Account (TFSA):
- This is a way of saving and investing money without having to pay tax on the interest you earn.
- You can open a TFSA at your bank if you are 18 or older, a Canadian resident, and have a Social Insurance Number.
- There are rules about how much you can put into the account in a year.
- You can invest the money in the TFSA as you choose, in savings accounts, GICs, and so on.
The Registered Disability Savings Account (RDSP):
- Savings plan made available to people who qualify for the Federal Government Disability Tax Credit
- Long term savings plan to ensure savings for a disables person
- Be eligible for the Disability Tax Credit
- Under the age of 59 (to receive the grant or bond, your must be under 49)
What’s an RDSP?:
- Every 1$ your put in, the federal government can give you a grant and match up to 3$ more depending on family income ( 3 500$/year based on contributions)
- The government can put up to a 1000$/ year and 20 000$ in your lifetime (bond)
- If you have the grand or the bond, your money is locked until the age of 59
Step to open an RDSP:
- File your taxes
- Qualify for the Federal Government Disability Tax Credit
- If you don’t receive it yet, please get the attached form filled out by your doctor and send it to the address given
- Go see a financial institution
- Bring your SIN and photo ID to the bank
The Canada Learning Bond:
- It’s a government benefit for low-income families
- It helps your to save for your child education after high school
- If you have a child born on January 1st ,2004 or after and if you are getting the National Child Benefit Supplement, you can apply for an 500$ RESP
- You don’t need to deposit any of your own money
- Each year that your child qualifies for the NCBS, the government will put an other 100$ in the RESP to a limit of 1500$
- It finishes when the child turns 17