It is common for investors to misunderstand the difference between investment registration and investment vehicles. A problem that likely stems from the abundance of financial jargon in our industry.
Investment registrations are tax efficient ways to save for goals such as Registered Retirement Savings Plans (RRSPs), Registered Education Savings Plans (RESP), Registered Disability Savings Plan (RDSP) and Tax Free Savings Accounts (TFSA).
An investment vehicle refers to the product an investor uses to grow their money, such as bank accounts, Guaranteed Investment Certificates (GICs), Mutual Funds and Segregated Funds.
Investors can utilize both registration and investment vehicles to their advantage by taking into account their goals, tolerance for risk and taxation. An investment vehicle or product can have any registration. For example an investor can purchase an RRSP GIC and/or an RRSP Mutual Fund. An investment vehicle with no registration is simply referred to as non-registered or open.
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