A non-registered savings plan is for you if you have reached your RRSP and TFSA contribution limits and would like to continue to save for a project or for your retirement. You will enjoy a higher rate of return than with your bank account and have the opportunity to put money into investment funds.
To save for retirement, you can contribute to investments that are non-registered, meaning they haven’t been registered with the Canada Revenue Agency (CRA), and that are sometimes called open accounts. You can also save for retirement by way of savings plans that are registered with the CRA.
The benefits of non-registered savings plans or open accounts:
- They can be easier to access should you need your money1
- No legislated restrictions on the amount of contributions you make to them
The benefits of registered savings plans:
- RRSPs – offer a deduction for contributions, although withdrawals are taxable
- TFSAs – no deduction for contributions, but withdrawals are tax free
- Both RRSPs and TFSAs offer the opportunity for tax deferred growth as long as the money remains in the plan
Because of the advantages of both non-registered and registered savings plans, it can be a good strategy to hold both in your portfolio.
Investment options for non-registered and registered savings plans
- Mutual funds*
- Segregated fund contracts
- Annuities
- GICs
Contact your advisor to learn more about saving for retirement and which investment options would best meet your specific needs.
*Mutual Funds license sponsored by Shah Financial Planning Inc.
Why it’s important to have registered investments in your portfolio
The chart below illustrates why it’s important to have some registered investments in your portfolio. Look at the after-tax value of the savings of someone who invested in a Registered Retirement Savings Plan (RRSP) versus someone who
invested in a non-registered plan.
Disclaimer: Insurance, Investment and Mortgage products & services are provided by Devangkumar Shah.
Mutual Funds license sponsored by Shah Financial Planning Inc.
Lotus Loans and Mortgage ltd. is the principle mortgage broker.