We’re not talking about cars here, but savings! Like cars, every savings vehicle has very different characteristics. What you want to transport (type of investment), the road used (investment horizon), the destination (short-term projects, retirement, school, etc.), and features (tax treatment, special characteristics, etc.) are all factors that influence your choice of vehicle. More precisely, it’s the combination of these characteristics and needs that guides the decision-making.
The RESP (Registered Education Savings Plan) is a way to save for a child’s post-secondary education. Contributions aren’t tax deductible but are supplemented by government grants.1 Earnings and grants are taxed in the beneficiary’s hands when withdrawn, while the amounts corresponding to the contributions aren’t taxable and can be refunded to the subscriber.
The RRSP (Registered Retirement Savings Plan) is a way to save for retirement while lowering your income tax during the contribution period. Funds are taxable only when withdrawn.
The TFSA (Tax-Free Savings Account) is a way to save tax-free. Contributions aren’t tax deductible, but withdrawals and investment income aren’t taxable.
In all cases, keep in mind your situation is unique! So, it’s essential you see the right financial advisor before making any decision regarding your savings.
To quickly differentiate the various savings vehicles and their differences, download our fact sheet. Stick it on your fridge!
1. Subject to obtaining the necessary authorizations to proceed with the grant applications. Some conditions apply. Check out our prospectus at kaleido.ca.
2. Family plan; not offered by Kaleido.
3. Canada Education Savings Grant (CESG) of 20% to 40%. Based on adjusted family net income. Quebec Education Savings Incentive (QESI) of 10% to 20%. Based on adjusted family net income. Some conditions apply. Check out our prospectus at kaleido.ca.