Investments
These can be the three different ways to inherit your $25,000.
1.RESP
Benefits
-Government grants helps the savings grow
Tax-deferred growth
-Contribute up to $50,000 per child
-No taxes payable on the money earned in an RESP until it’s withdrawn.
-When RESP grants and earnings are withdrawn, they are taxed at generally low tax rate.
The sooner you start, the more you save
-Needs the Social Insurance Number to become the beneficiary of an RESP.
You would save more when you start at 1 year old, than starting to save at 10 years old.
Below are the types of RESPs:
2. TFSA
Benefits of TFSAs
Tax-free growth
-You don’t pay taxes on the investment income or growth earned in your TFSA
Contribute up to $5,500 a year
-Contribute up to $5,500 annually to your TFSA
-Any unused contribution room is carried forward.
Tax-free withdrawals
-Don’t pay taxes on withdrawals.
You can put back any amounts you withdraw
-Allows you to re-contribute amounts that you withdraw, in the year after you withdraw them.
Below are the types of TFSA:
3.GICs
Benefits -Term Deposits
Safety and security
-Original investment and interest payments are guaranteed.
Terms
-Range from 30 days to five years.
Eligible for non-registered and registered investment plans
-Available in non-registered and registered accounts (RSP, RESP, RIF and TFSA).
-Term Deposits are available in non-registered and registered accounts (TFSA).
Types of GICs
TD Cashable GICs & Term Deposits
-Give you the security of a guaranteed rate with the flexibility of an early cashing option.
TD Canada Trust Non-Cashable GICs & Term Deposits
-For investors who are able to lock in their funds for a specific period of time.
-Well suited to an investment strategy of laddered maturities.
TD Canada Trust Market Growth GICs
- Market Growth GICs offer you the 100% protection
-Take advantage of a higher return of the stock market
TD Canada Trust Foreign Currency GICs & Term Deposits
-Can earn interest with the secure investments for the foreign funds
-Allow to spread your dollars among some of the world’s currencies, while earning interest
The best investment to inherit $25,000, would be to invest in RESP because it is an individual plan only for students, that are going to post-secondary education/training. With this investent, not only will the savings grow over the years, but the government will contribute money to this investment as well. Also, with this investment you can contribute up to $50,000 per child. In addition, when you save your money in TD Bank's RESP, you don't pay the tax until you withdraw the money.
The Investment Choice
