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With Guaranteed Investment Certificates (GICs), you can grow your retirement savings without losing sleep over market volatility.
An RRSP GIC is a term deposit that’s held within a registered savings account. If you need a refresher on what that means, here’s a quick review:
GICs can be a great and secure addition to your retirement planning portfolio. Here’s why you might consider an RRSP GIC!
Since your GIC is held within your RRSP, you can defer taxes on the interest you earn. You don’t need to pay taxes on accrued interest until you withdraw the funds.
If you hold a GIC within a non-registered account, the interest you earn will be taxed at your marginal tax rate.
But if you hold that same GIC within a registered retirement savings plan (RRSP), you can defer taxes until you decide to withdraw money from the plan.
This grants you unique tax benefits, because you can take out money once you’ve retired and your income is lower. That means you’ll pay less in taxes than you would have otherwise.
You have 2 options when your GIC reaches the end of its term:
Not sure which investments you should hold in your RRSP? Here’s why you should consider a GIC!
When it comes to your retirement savings, stability may be the most important thing to you. You want the money you save for retirement to be guaranteed – especially as you get closer to retiring.
For that reason, investing in the market may be too volatile for your risk tolerance. A GIC allows your savings to grow, but without the rate fluctuations you’ll see with other investments.
Since you can’t take money out of your GIC until it matures, you won’t be tempted to spend it! This ensures your retirement savings stay saved for retirement. If you have trouble sticking to a budget, a GIC can help keep you on track.
With GICs, you may see lower returns than you would by investing in the market.
However, you won’t need to worry about volatility. No matter how the market performs, your interest rate remains constant for your entire GIC term.
If stability is more important to you than earning the highest return possible, an RRSP GIC may be a good fit.
Whenever you contribute to your RRSP, you can deduct that money from your taxable income (up to your annual maximum). Then, once you file your tax return, you’ll see tax savings from any money you contributed to your RRSP.
An RRSP GIC allows you to enjoy this tax benefit and defer the taxes you’d pay on the income earned within your RRSP.
One way to structure your retirement savings plan? Invest it in a GIC laddering strategy (also known as a GIC Rate Climber). Here’s how it works:
Learn more about how a GIC Rate Climber works!
Combine a guaranteed return with our GIC rates - that’s what you’ll get with an RRSP GIC!
With Cambrian, all deposits are guaranteed without limit by the Deposit Guarantee Corporation of Manitoba. You can trust your money is safe with us.
Take advantage of the tax benefits an RRSP offers while enjoying the security of a GIC. To open your RRSP GIC, contact us today!
We would be happy to discuss your unique situation with you.
Our goal is to make complex topics like this one, simple.
It takes less than 5 minutes to make an appointment or to apply online. It is up to you how you want to meet your advisor - you will have the option to meet your advisor:
