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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 No income earned in the account is taxed (including interest) until the funds are withdrawn many years from now.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.

 

Features:

  • 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

All RRSP annuitants please be aware that there is an updated Declaration of Trust that can be found here.

 
 
 

Tax-Free Savings Account (TFSA)

A TFSA is a registered investment or savings account. The interest you earn is income tax-free but the amount of money that you can be contribute to a TFSA is limited each year. A TFSA can be locked in as a GIC or used as similar to a standard Savings Account*

Features:

  • 2021 Contribution Limit: $6,000
  • Interest Rate: Varies - View Rates
  • Interest paid at end of term or paid monthly
  • Insured and Guaranteed with no limit
  • Contributions are NOT tax-deductible

The current maximum cumulative amount that can be held in a TFSA account as of January 1, 2021 is $75,500.

 

*There are some limitations with TFSA. Read about them by clicking here, or ask your Motor City Representative for details.

 

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.

 

Features:

  • 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 withdraw amounts dependent on age
 
 
 

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.

 

Features:

  • 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 withdraw amounts dependent on age
 
 
 

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