Everyone deserves to feel financially stable as they age, especially when they want to ensure they have enough money to care for their family without falling short. While you can set money aside in a savings account or buy a piggy bank, many financial options in Canada might also catch your eye, such as the following:
Registered Education Savings Plan (RESP)
A registered education savings plan, or RESP, is a long-term savings plan for your children’s post-secondary education. You might have many questions about RESP, like ‘What are the benefits of an RESP?’ and ‘How does RESP work?’
Once you choose a provider, a parent or relative of a child can open an RESP with them and name one or multiple children as beneficiaries. You can then start making regular contributions while your chosen provider will apply for government education savings grants on your behalf. All investment earnings in an RESP are tax-deferred while in planThis savings plan ensures your children can have a financial headstart when paying education-related costs, such as tuition, accommodation, books, and more.
Guaranteed Investment Certificates (GICs)
If you’re ready to explore investment products but don’t want to take any unnecessary risks with your money, consider guaranteed investment certificates (GICs) in Canada. GICs are seen as safe and secure fixed-income investments. You are typically ensured your entire original investment at the end of your investment period, but you can also earn additional money in interest on a formula or with a fixed or variable rate.
Registered Disability Savings Plan (RDSP)
As a parent or relative of someone living with a disability, thinking about the future can be scary. You might worry about their financial situation and whether they’ll be able to live a comfortable life. With a registered disability savings plan, it might be possible.
These long-term savings plans are designed to help Canadians living with disabilities and their families secure their financial futures. Along with having access to long-term savings, you might also be able to bolster your account with government grants and bonds. You don’t have to pay taxes when you want to withdraw your funds, but you may have to pay tax on earned income and return government grants.
Tax-Free Savings Account (TFSA)
A tax-free savings account (TFSA) is a registered savings plan for Canadians aged 18 years and over with a social insurance number to save tax-free money. While your contributions aren’t tax-deductible on income tax, any contributed amount in your TFSA is tax-free, even when you want to withdraw it. You can choose from three TFSA accounts: an arrangement in trust, a deposit, or an annuity contract.
Registered Retirement Savings Plan (RRSP)
A registered retirement savings plan, or RRSP, is a long-term savings plan for earning and saving money until retirement. You can contribute up to 18% of your earned income, less your pension adjustment, into your RRSP. Contributions are tax-deductible to reduce taxable income, and investment earnings are tax-deferred until retirement.
Everyone deserves to feel like their financial future is certain. Whether you want to set funds aside for an emergency, education, or retirement, you might like to explore some of these financial products in Canada.
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