Whether you are looking to purchase your first car, build an emergency fund, or save for your children’s tuition, investing is key to achieving your financial goals. Investing ensures present and long-term financial security for you and your family. In Canada, there are many investment options to help you save and grow your money, and it’s important to get started early.

Types of Investments

Choosing the appropriate investment plan that suits your needs and investor profile is crucial. For starters, here are a few popular plans among newcomers in Canada:

Tax-Free Savings Account (TFSA)

Registered Retirement Savings Plan (RRSP)

Registered Education Savings Plan (RESP)

Non-Registered Investment Account 

Overview

Allows you to easily save for your short-term and intermediate goals. Learn more here.  A retirement savings plan where your returns are tax-sheltered. Learn more here. A tax-sheltered plan to help you save for your child’s post secondary education. Enables receipt of contributions from the Canadian government. Learn more here. A general investment account where you can choose to invest in a variety of assets. Learn more here

Are investment earnings taxed?

No  No  No  Yes

Are contributions  tax-deductible?

No Yes No No 

Are withdrawals taxed?

No Yes – subject to income tax at the time of retirement, when your tax rate will be much lower. Yes – at your child’s tax rate, only grant amount and investment earnings are taxable. Yes

Expiration

No expiry Must be withdrawn when you turn 71, via the Registered Retirement Income Fund.  Your child may decide not to attend post-secondary education or decide to enrol later. An RESP remains open for up to 36 years.  No expiry

4 tips to get started on your investing journey: 

There is no one-size-fits-all solution when it comes to investing, therefore, sufficient groundwork is important. Here are a few things to keep in mind before you start: 

  • Budget and save before you invest

Practical and effective investing should always begin with budgeting. You will have no room to invest if all of your money is already spoken for. Read our blog to learn the basics of budgeting in Canada. 

  • Set clear financial goals

Begin by creating a list of financial goals, then assign a time frame and cost to every goal. This will inform your investment strategy by helping you identify the type of investment plan appropriate for meeting your goals.

  • Research about your investment options

You’ll need to have a healthy understanding of your investment options in order to make coherent decisions. Research about the contribution limits, tax treatment, and any risks of the investment. If you are unsure, consult a financial advisor.

  • Pay off your high-interest debts

It’s important to pay off any high-interest credit card debt, student loan debt, or other liabilities before you begin investing. Paying off these debts will improve your monthly cash flow and ability to withstand investment risks. 

The appropriate investments can help you reach your financial goals and provide financial security in the future. Taking the time to learn about investing can help you understand the market and adjust your expectations. Lastly, remember to be patient – investing is a long process and returns don’t happen overnight!

Join us for our next webinar Investments and Goal setting: Keys to financial success in Canada.  Thursday, September 5th, 2019 @ 11am EDT / 8:30pm IST. Save your spot today.

Sign up now

 

Arrive x RBC

Arrive and RBC are committed to helping set you up for financial success in Canada. We know that figuring out your financial life in Canada is more than just finding a bank account, it’s also about finding the right partner to invest in your financial success. RBC is the largest bank in Canada* and here to be your partner in all of your financial needs. 

Ready to start investing? Speak to an RBC Banking Specialist today. Click here to be contacted.