A non-registered account is a type of investment account not affiliated with the Canadian government. It holds certain advantages that other types of plans don’t, and can be a worthy addition to your retirement planning.
Where Can I Get A Non-Registered Account?
There are a variety of financial institutions that offer non-registered accounts, including banks, mutual funds, and other financial service providers.
What Can I Do With A Non-Registered Account?
Non-registered accounts allow you to invest and trade securities. This can be an individual or joint account. Securities can be thought of as investment vehicles that help you earn capital gains, interest, and dividends. When you put your money in a non-registered account, it grows on its own, and can be significantly greater than its original value over time.
Exchange Traded Funds (ETFs), stocks, and bonds are examples of the types of securities you can invest in.
The investments don’t have to be long-term. You can make short-term trades on a daily basis as well. You’re also not limited as to how much you can contribute to your non-registered account. You can add as much as you’d like, which is not the case with other types of accounts such as Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs).
What Are The Types Of Non-Registered Accounts?
There are two types of non-registered accounts – cash and margin.
Cash accounts let you use your own money to make investments.
Margin accounts allow you to borrow funds. This is riskier than using a cash account, but it comes with a greater reward if your investments perform well.
How Are Non-Registered Accounts Taxed?
What you earn with your non-registered account is taxed according to how your funds grew.
Capital gains, accrued interest, and dividends are all taxed differently with respect to your marginal tax rate:
- Capital gains – taxed on 50% of your marginal tax rate
- Interest – fully taxable at your marginal tax rate
- Dividends – taxed based on gross amount. However, you earn a dividend tax credit
Note that your entire portfolio does not have to consist of one type of investment. By assessing your earnings and current market conditions, you can maximize your earning power.
We Are Invested In You
At Fidusure Financial, we strive to give you the best opportunities for financial success. With our assistance, you can build your portfolio and accrue funds so that you can have a financial cushion. No matter the financial goal, we are here to help you achieve it. Call us today at (647) 567-4702.