Mutual Funds (MF) – pools money to invest in various stocks, bonds or shares. Volatility is associated with MF, the money invested can give you a quick growth or loss in a specific time period. There are different MF offered by financial institutions, providing to the investor the access to cash equivalent, income, balanced, equity, real estate, index funds, varies from low to high risk investments, short or long term period.
Mutual Funds can be Canadian or Foreign equity markets.
Segregated Funds, or IVIC- individual variable insurance contract, guarantees maturity and death benefit up to 100% of the principal invested, having reset options and creditor protection feature. That is your insurance and investment option in one contract with guarantees available through insurance companies only!
TFSA – tax free saving account for individuals aged 18 and older that does not charge taxes on any contributions, interest, dividends or capital gain earned. Was introduced in Canada from 2009 with 5000$ limit per year and increased to 5500$ in 2013. The contributions are not tax deductible with carry forward option in case of unused room.
Annuities – annual guarantee amount for a fix term, or life, based on age and gender of the annuitant. Exists in the form of registered and unregistered accounts, prescribed or non prescribed. Income is taxable.
RESP (registered educational saving plan) for families with children, saving money for their educational needs. Existing as individual, group and family plans.
Contribution limits are:
-50000 $ – max contribution per nominee in total
-Must be used after 31 years of starting date.
-Nominee must be at least 16 years old and enrolled in a full time qualified program.
Payments are made in the form of EAP (educational assistance payments) and EFA (educational financial assistance) Government is assisting with CESG (saving grants) in amount of 20% on the contributions and limited to 7200$ in total.
And CLB (Canada Learning Bonds) limited to 2000$ in total.
All contributions and grants are growing in the plan based on the proposed interest rate of the Plan Holder, but is not guaranteed!
RDSP (registered disability saving plan)