U3 Saving Plans Options

Question 1

Mutual Funds

Answer 1

mix of stocks from different companies - you can have a mix of low, medium and high risk/reward

Question 2

ETF

Answer 2

Purchases the stocks listed on an index, S&P 500, TSX, Dow Jones

Question 3

GIC’s

Answer 3

• Guaranteed Investment Certificates
• savings plan in which you deposit a fixed sum of money for a specific length of time, or term, at a fixed rate of interest
• terms of 6 months to 5 years
• high interest like 1.5% to 4%
• once you sign the contract and submit your money, you cannot access your money again until the term is up.once you sign the contract and submit your money, you cannot access your money again until the term is up

Question 4

TFSA

Answer 4

• Tax Free Savings Account
• ou can place up to $6500 and pay no tax on the interest earned
• ‘kicks in’ when you are 18

Question 5

RRSP

Answer 5

• Registered Retirement Savings Plan
• helps you to save money by allowing you to invest a portion of your yearly income without paying income tax on your income
• You can also receive money back from your yearly income tax
• Only when you withdraw the money, will you have to pay tax on it
• First time owners can withdraw their RRSP’s tax free and use it as part of the down payment, They must repay the RRSP within a certain time limit.

Question 6

RESP

Answer 6

• Registered Education Savings Plan
• tax sheltered plan designed to help finance post-secondary education
• When the beneficiary becomes of age to attend school, or becomes a fulltime student, they may with draw the money; little tax on the money

Question 7

FTHB

Answer 7

• first time home buyer incentive
• helps people across Canada purchase their first home
• The program offers 5 or 10% of the home’s purchase price to put toward a down payment
• This addition to your down payment lowers your mortgage carrying costs, making home ownership more affordable