Types of investment accounts and plans

To purchase and sell securities, you need an investment account or plan to hold your cash and investments (stocks, bonds, ETFs, mutual funds etc.) You can open investment accounts through financial institutions and brokerages through their registered advisers and online.

You can use several types of accounts or plans in Canada that are broadly categorized as either “registered” (TFSAs, RRSPs, RESPs) or “non-registered” accounts for investing. Each has unique features and considerations, which you can learn more about in this section.

Non-registered investment accounts generally have no restrictions on how much you can contribute or withdraw from the account. Interest income in a non-registered account is taxed at your marginal tax rate, but includes special considerations for dividends and capital gains. Dividends from your investments are taxed on a gross amount but receive a dividend tax credit based on the province you live in. Capital gains in a non-registered account are taxed on a net basis, with your marginal rate paid on 50% of its value. Finally, any interest income generated in your non-registered account is fully taxable at your marginal tax rate. Visit the Alberta Government website to learn about the dividend tax credit for Albertans.