Investing

Questions on RRSP, RESP, TFSA and Regular Trading Accounts

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  • May 16th, 2020 3:39 pm
[OP]
Sr. Member
Jul 30, 2016
704 posts
304 upvotes

Questions on RRSP, RESP, TFSA and Regular Trading Accounts

Dear Gurus, I am a new Investor started only couple of months ago. You guys clarified few questions on investments accounts. I understand investing it's a continuous learning. I have a question, kindly advise.

1. I have RRSP, TFSA and RESP DI accounts with RBC. RBC gave me 25 free trades on each account. So, I had invested 5% of cash during march end, i am keeping remaining 95% in cash mode between these accounts. My question is, i had opened regular trading account for me and my wife 2 months ago just for safe side, they are saying that they will give 25 free trades if we deposit 5K before June 15th. Is it worth to use Regular trading account as well ? What are the pros and cons of using regular trading account ? I am not familiar with taxation policies on regular trading account. Can someone please advise on this ?

Thanks,
2 replies
Deal Addict
User avatar
Feb 1, 2012
1482 posts
2079 upvotes
Thunder Bay, ON
Generally best to only start investing in a non-registered account after you have used up all RRSP and TFSA room. Non-registered accounts have additional taxes you will never pay in registered accounts, on interest, dividends and capital gains.

You will receive a T3 or T5 tax slip annually from your broker or fund provider. This will cover any dividends, interest or capital gains earned in the year by your investments. Just plug the data from the slip into your tax program. In addition to that whenever you sell stocks or mutual funds you will have to declare any capital gains and pay tax on them. If you have a capital loss you may use it to offset capital gains. You will need to track your adjusted cost base with each buy or sell to enable proper reporting of capital gains and losses.

Here are some good links:
https://www.getsmarteraboutmoney.ca/pla ... s-and-tax/
https://www.rbcgam.com/en/ca/learn-plan ... nts/detail
http://www.milliondollarjourney.com/how ... part-1.htm
http://www.milliondollarjourney.com/how ... terest.htm
http://www.milliondollarjourney.com/cal ... se-acb.htm
https://www.canada.ca/en/revenue-agency ... ncome.html
https://www.huffingtonpost.ca/tea-nicol ... 92974.html

In addition to that, mutual funds, ETFs and some REITS distribute Return of Capital have Reinvested Capital Gains Distributions that will impact your Adjusted Cost Base. I won't cover those here, but you could google the terms if you are interested.
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.

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