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Types of Investment AccountsRRSPs A way of saving for retirement that shelters your earnings from income tax. Within prescribed limits, contributions to an RRSP are tax-deductible, and income earned within the RRSP escapes tax until it is withdrawn. This tax deferral allows you to save much faster than you otherwise might. Withdrawals from the RRSP, usually at retirement, are taxed at regular rates. Spousal Registered Retirement Savings Plan (SRSP) is an RRSP that is owned by your spouse, to which you can contribute. However, spousal contributions reduce the amount you can contribute to your own RRSP. Provided no money is withdrawn within two years after the year of your last contribution, the money will be taxed in your spouse's hands upon withdrawal. Spousal RRSPs are used by many couples to improve the tax effectiveness of their retirement planning. RESPs A plan that enables a contributor, on a tax deferral basis, to accumulate assets on behalf of a beneficiary to pay for a post secondary education. TFSAs The Tax-Free Savings Account (TFSA) offers an array of tax benefits to help you invest throughout your life. It has been described as the single most important personal investment vehicle since the introduction of Registered Retirement Savings Plans (RRSP) back in 1957. Like an RRSP, qualifying investments for your TFSA include: cash, GICs, mutual funds, publicly traded securities, government and corporate bonds. Contributions to a TFSA are not deductible for tax purposes, however, interest and investment income, including capital gains, earned in a TFSA is not taxable, even when withdrawn. Other Types of Investment Accounts:
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