Where would you invest if you had extra money
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Posted on: 15-10-08 15:12:29
5000 will also lower taxes and give you great savings so it is a great idea.
Thanks
Quote:You will still need to pay taxes on interest earned between now and 1st Jan.
Originally posted by irock
you don't have to wait untill January 2009 for opening a tax free account. INGDIRECT has already started a tax free saving account where you can start contributing right now & the funds deposited in the promotional Tax-Free Investment Savings Account opened between October 4 and December 31 will be transferred to a new Tax-Free Savings Account so you won’t miss a minute of Tax-Free interest.
I'm not saying it's a bad idea - just pointing out that there is tax implications between now and 1st Jan.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:[snip] That's what I meant by fees.
Originally posted by bc2on
Oh, I am not paying any fees for purchasing these funds. There is expense ratio
The MER /is/ a fee that you are paying for the management and allocation of your investments.
Also includes trailer fees being kicked back to your broker.
There are several low-cost (i.e. low MER) equity funds whose holdings are very similar to high ratio mutual funds.
Especially true in Canada, where the pickings are rather limited.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by pratickm
Quote:You will still need to pay taxes on interest earned between now and 1st Jan.
Originally posted by irock
you don't have to wait untill January 2009 for opening a tax free account. INGDIRECT has already started a tax free saving account where you can start contributing right now & the funds deposited in the promotional Tax-Free Investment Savings Account opened between October 4 and December 31 will be transferred to a new Tax-Free Savings Account so you won’t miss a minute of Tax-Free interest.
I'm not saying it's a bad idea - just pointing out that there is tax implications between now and 1st Jan.
yes you are right. We need to pay tax on the 6% interest rate income for this year. But that's the reason they have doubled the interest rate for this period.
The best thing is your tax free income in form of interest start straight from the 1st of January 2009 because this temporary high income account gets automatically transfer to the interest free saving account being implemented on 1st of Jan.
And also the $5000 which you deposit right now will be accounted as your next year contribution.
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i..........rock........!!!!!
Under what circumstances can one cash out from the account?
Can one invest in anything else or is it just cash deposit with 3% interest, remember it maybe less than inflation?
What happens when you are cashing it? Do you pay tax then?
Thanks
Quote:No restriction.
Originally posted by bc2on
Under what circumstances can one cash out from the account?
It's just like a chequing/savings account - you can deposit and withdraw at will.
Quote:You can invest in about the same things as an RRSP.
Can one invest in anything else or is it just cash deposit with 3% interest, remember it maybe less than inflation?
This includes mutual funds, common stocks, bonds, options, precious metals, foreign equity, etc.
There /are/ some restrictions that are listed on the CRA site.
But 99% people will be ok with the above options.
Quote:No, that's the whole point.
What happens when you are cashing it? Do you pay tax then?
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
bc2on
I think you are getting this account wrong.
The contribution to this account doesn't give you tax credit on your contribution. It's not like the RRSP contribution where we get the tax credit for the amount of contribution we make. It is only a savings account where in you can deposit $5000 a year individually & the interest earn on that amount will be tax free.
You won't get a T5 slip for the interest earn on this tax free saving account. That's it...... the amount you contributed from your present year income is still to be taxed normally.
So $5000 at 3% interest rate annually will make you earn $150 annually tax free.
Just imagine every year you contribute $5000 to this account & at the end of 10 years you might be earning an interest of $1500 tax free with your total savings of $50000 in 10 years. Same with every member of the family.
You can withdraw that amount from this account at anytime but you can only deposit $5000 a year in this account.
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i..........rock........!!!!!
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