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Segregated funds are investment products provided by life insurance companies. They are similar to the traditional mutual funds in which investors hold a large range of securities such as- Bonds, Stock, etc to grow the value of their entire pool but segregated funds (usually called Seg. Funds) differentiate with mutual funds in some ways including:

The primary differences include:

Guarantee- Principal guarantee on maturity and on death plus the ability to protect the funds from creditors going forward. You also get the guaranteed maturity protected against the market downturns.

Protection for potential creditor - Segregated funds is generally protected against the seizure by creditors. It’s a great investment option for professionals and business owners who want to be protected their investment against unexpected bankruptcy or lawsuit.

With segregated funds:

  1. You can allocate your insurance policy premiums to your segregated fund investment options selected by you and your advisor.
  2. Depending on the fund’s investment objectives, these segregated funds can be invested in stocks, bonds and other assets.

 

Are you planning to have a smart tax-effective way to build your retirement savings? You can choose from range of safe and simple registered saving products such as RRSP, RRIF, RESP and TFSA.

Registered Retirement Savings Plan (RRSP)

RRSP (Registered Retirement Savings Plan) is generally a common term but there is a lot more to this term rather than just putting your money and waiting for the retirement to redeem the principal with extra interest.

RRSP or Registered Retirement Savings Plan is a special type of investment designed to help Canadians save for Retirement. You or your spouse on common-law partner can make a contribution to RRSP. These contributions can be used to reduce your tax. Income earned from your RRSP is tax exempt provided the income remains in the plan. Receiving payment or withdrawing from the plan may attract some tax payment.

Benefits from RRSP include the following:

  1. Tax Credits
  2. Give you a diversification in your investment portfolio
  3. Give you compound interest benefits
  4. Could be used as a down payments for first time home buyers.
  5. Tax-Deferred Growth
  6. Can hold different types of investment.

 

Registered Retirement Income Fund (RRIF)

At the certain age of retirement, you will need to convert your RRSP into Retirement Income Option. Registered Retirement Income Fund (RRIF) is designed to pay you a minimum amount each year starting from the year after the enrollment.

  1. Keep your funds tax sheltered
  2. Control over the investment of your funds
  3. Option to convert your funds to more secure guaranteed income at any time

Your withdraw from your RRIF is considered income and will be subject to taxes.

 

Registered Education Savings Plan (RESP)

A bright future requires higher education so you need to get financial support with Registered Education Savings Plan that is an effective savings tools to help your children or grand children attain higher education. With RESP, one can:

  1. Contribute up to a lifetime maximum of $50,000 per child
  2. You can receive $500 per beneficiary per year.
  3. All the money saved in the plan is tax-free until it’s withdrawn
  4. Only the accrued interest is taxable as income once the beneficiary enrolls in his/her studies

 

Tax Free Savings Account (TFSA)

The Tax-Free Savings Account (TFSA) is a flexible, registered, general-purpose savings vehicle that allows you to earn tax-free investment income. This can help you save towards your short and long term financial goals. The TFSA can be used to complement other registered savings such as RRSP and RESP.

Benefits from TFSA include the following:

  1. No tax paid on income and withdrawals
  2. No income requirement to open one
  3. Can be withdrawn anytime for any amount up to the total investment amount.

 

A term deposit is a cash investment held at a financial institution for a known or agreed rate of interest over a fixed amount of time (term). The term usually ranges from 1 month to 10 years.

This is typically designed for investors or people who have some funds to be packed while waiting for the appropriate time to use or invest it. For the funds to be sitting in a bank account which may not generate any interest, you will be better of to generate some interest using Term deposit. It can also be used as part of investment mix.

Benefits and features include:

  1. Capital security.
  2. Pre-determined interest rate.
  3. Interest calculation is made daily and paid at the time of maturity or annually to your nominated amount.

 

Guaranteed investment Certificate or GIC is an ideal investment plan that makes your money grow and protect your principal with flexible terms ranging from 3 months to 5 years.

It pays you higher interest than a savings account. With these GICs plans, you may be able to withdraw before maturity depending on whether or not its a cashable GIC. Otherwise, its has to be withdrawn at maturity or it rolls over for the same term as before and the interest rate will be adjusted accordingly. There is usually a minimum amount required to start.

Benefits of GICs include the following:

  1. 100% Protection to Your Capital
  2. Will be able to generate steady and predictable income
  3. Reduce Risk and diversify the overall investment portfolio
  4. Options to pay at your ease (monthly, quarterly, semi-annually or annually

Depending on the needs of our customers, there are different types of GICs available. If you are looking for the right investment plan to invest your extra money with high security and guaranteed rates, this can be an option for you.

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