Non-Registered or Open Investment Account

A Non-Registered, Cash or Open investment account is typically only used once you have no more contribution room in your TFSA and RRSP, as a corporate investment account, or if you are borrowing money to invest. When you borrow money to invest, we recommend you put that money in a non-registered account as this way you can deduct the associated interest incurred on the loan.

There are no tax advantages to investing in a non-registered investment account and no contribution limits. Investments in a non-registered account can earn interest or dividend income that is taxed as it is earned or generate capital gains that are taxed as they are realized. This investment income is taxed as it is earned or realized, but withdrawals are not.

This is the type of account we would set up for minors who have money to invest from a Job, a gift from family or an inheritance. A minor cannot own an investment account in Canada, so these are set up as trust accounts. Typically, the minor’s parents or grandparents would manage the account in trust for the minor. Once the minor became an adult the account will roll into the minor’s ownership.

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