You can always reach out in the app or email firstname.lastname@example.org if you’re not sure what type of investment account is right for you. A portfolio manager from Tactex Asset Management will respond to advise you about the account that is best suited for you.
Through Moka, your portfolio manager, Tactex Asset Management, offers three types of investment accounts:
Tax-Free Savings Accounts,
Registered Retirement Savings Plans
and non-registered accounts.
The Tax-Free Savings Account (TFSA)
Don’t be fooled by the name: a Tax-Free Savings Account is also a great option for investors. These accounts offer both flexibility and tax savings. Investments in TFSAs grow tax-free. This means that any income made on investments in a TFSA will not be taxed. Plus, it’s free to withdraw from a TFSA, so the money is relatively liquid.
However, there is a maximum amount that investors can contribute to their TFSA each year. As of 2018, $57,500 is the total maximum amount that could be contributed to a TFSA, but this amount will be less if you turned 18 after 2009, have lived outside of Canada, or removed any money from your TFSA this year. If you’re not sure how much you can contribute, speak to a portfolio manager or log in to the Canada Revenue Agency portal to see the exact contribution room in your account.
The Registered Retirement Savings Plan (RRSP)
An RRSP is a good option for investors who already have an emergency fund, are in their peak earning years, and have already made the maximum contribution to a TFSA. This kind of account can also be a good option for investors who are saving to buy a home under the Home Buyers’ Plan (HBP) or saving to go back to school under the Lifelong Learning Plan (LLP).
Please note that whatever contribution an investor makes to their RRSP is deducted from their reported income at tax time, which will likely lower their tax bill. However, withdrawing money from a Moka RRSP is not free and has tax implications because the withdrawn funds will be considered income for the year in which they were withdrawn.
The non-registered account
A non-registered account is free to withdraw from and has no contribution limit, but it does not come with any tax benefits.