What is a Registered Plan?
Introduced in 1957 to promote savings for retirement by employees and self-employed people, Registered Plans offer tax advantages compared to non-registered plans.
Contributions are deductible from your total income, reducing the income tax you pay for the year. No income earned in the account is taxed (including interest) until the funds are withdrawn many years from now. By this time, you'll be retired and your income will probably be smaller, thus your tax rate be lower than it is now.
All deposits made to registered plans are insured and guaranteed with no limit on the maximum amount. Deposits held in registered savings plans are separately insured form deposits held in other accounts. Registered Plans include RRSP, RRIF, LIRA, and LIF.
Speak to your Motor City Financial Services Representative to find the best solution for your financial needs.
OTHER TYPES OF REGISTERED PLANS
Registered Retirement Savings Plan (RRSP)
RRSPs at Motor City work a little bit differently than they do at other financial institutions. RRSPs with the best rate of return are cash deposits that are locked in as a GIC. If you want a traditional RRSP that you can make contributions to, visit our Online Investing page.
- Interest Rate: Varies
- Interest paid at end of term
- Short-term and Long-term options
- Redeemable and Non-redeemable options
- Insured and Guaranteed with no limit
- Minimum Investment of $500
- At age 71 a RRSP is converted to a RRIF
Registered Retirement Income Fund (RRIF)
A RIFF is what your RRSP gets converted to when you reach the age of 71. It also means that you don't have to cash in your RRSA and pay a large amount of income tax that year. Your RIFF allows you to withdraw funds while still earning interest tax-free.
Locked-In Retirement Account (LIRA)
Not to be confused with a former European Currency, a Locked-In Retirement Account is what happens to your company pension if you change employers before retirement. You can't contribute to a LIRA but you can choose where and how it's invested.
Life Income Fund (LIF)
Similar to a RIFF but these funds are converted from a Locked-In Retirement Account (LIRA) when you reach the age of 71. A LIF allows you to withdraw funds while still earning interest tax-free.