Wealthsimple Invest offers a range of different accounts to suit your financial needs. You can open both registered and non-registered accounts.
A registered account is an account that is registered with the Canada Revenue Agency (CRA) using your social insurance number (SIN). When you open a registered account, we’ll register it with the government on your behalf.
Registered accounts often have tax benefits, although they also come with certain restrictions, like contribution limits.
A non-registered account is an account that is not registered with the government. With non-registered accounts, there are no contribution limit, no penalties, and no limits to how many you can open. However, you are taxed on every dollar you earn, including capital gains, interest, and dividends.
If you have one of these accounts at another financial institution and would like to transfer it to Wealthsimple, take a look at our guide to transferring your account.
Tax-Free Savings Account (TFSA)
The tax-free savings account (TFSA) is designed to help you save and invest money without paying tax on the gains.
Although it is called a ‘savings’ account, a better name for it would be a ‘investment’ account since you can invest money in all kinds of investment products from within a TFSA. When you open a TFSA in Invest, we’ll automatically invest your funds for you based on your risk profile.
There is a limited amount you’re allowed to contribute to a TFSA each year.
- You can open multiple TFSAs in Wealthsimple Invest.
- A TFSA must be held by one individual only. Each person has their own individual contribution limit, which cannot be combined with anyone else's.
- You can withdraw as much money as you like from a TFSA, however the amount you withdraw will not be added back to your total contribution room until the following calendar year.
- You can ask us to invest some of your TFSA in a ‘high-interest savings’ ETF if you plan to make a withdrawal within a shorter timeframe.
- You can designate beneficiaries and successor holders to your TFSA.
- There are penalties if you over-contribute to a TFSA.
- If you are a US citizen and are considering opening a TFSA, please note that the IRS considers TFSAs to be ‘foreign trusts’ and therefore any income earned in these accounts would be considered taxable on your US tax return.
Registered Retirement Savings Plan (RRSP)
A registered retirement savings plan (RRSP) account is designed to help Canadians save for retirement.
The money you contribute to your RRSP is tax-deductible. This means you can subtract the amount you contribute from your income and pay less in income taxes.
Besides saving for retirement, you can also use funds from your RRSP to buy a home or even fund your education. When you open an RRSP in Wealthsimple Invest, we’ll automatically invest your funds for you based on your risk profile.
- You can open multiple RRSPs in Wealthsimple Invest.
- You can ask us to invest some of your RRSP in a ‘high-interest savings’ ETF if you plan to make a withdrawal within a shorter timeframe.
- You can designate beneficiaries and successor holders to your RRSP.
- To avoid unnecessary taxes, you should convert your RRSP to an RRIF by December 31st of the year you turn 71.
A spousal registered retirement savings plan (Spousal RRSP) is an RRSP that can help lighten the tax load for couples with a big income disparity.
It helps you pool your retirement savings, so that the higher-income earner doesn’t have a large pile of retirement savings in their RRSP while the lower-income earner has a small pile.
Your individual contribution limit remains the same whether you have an RRSP, a Spousal RRSP, or both.
Locked-in Retirement Account (LIRA)
If you have a pension from a former employer but are not retired, you’ll need a LIRA (or an LRSP). You can't contribute to a LIRA, but you can take advantage of Wealthsimple's investment strategy for the funds in your account.
- You must convert your LIRA to a Life Income Fund (LIF) by the time you turn 71.
Registered Education Savings Plan (RESP)
A Registered Education Savings Plan lets you put money aside for a child's education. Contributing $2,500 per year will get you the full Canada Education Savings Grant (CESG) The CESG matches 20% of your contributions to an RESP up to a maximum of $500 per year. There are additional grants available for low income families and residents of certain provinces.
- Anyone can open an RESP for a child.
- An individual can open an RESP, or you can open a joint family RESP with a spouse or common-law partner.
- You can contribute a lifetime maximum of $50,000 per child to your RESP
Wealthsimple Save is a savings account. It currently pays 0.5% interest.
A Save account is a good choice when you need to access your funds quickly. People often use it to save for a near-term purchase, or to build an emergency fund. A Save account is a non-registered account, so you’ll need to report the interest you earn each year in your tax filing.
- There is no minimum deposit.
- There are no fees for deposits, withdrawals or holding money in the account.
A Joint Save account is the same as a Save account, except that multiple people can contribute and withdraw from the account.
When it’s tax season, either owner can report the interest earned in the account, or you can split the income evenly between the two owners.
You can have multiple Joint Save accounts with different co-owners, or multiple accounts with the same co-owner.
Non-registered personal account
A non-registered personal account (or joint account) has no deposit limits or withdrawal restrictions. All the interest, dividends, and capital gains that you earn in a non-registered account will have an impact on your tax reporting.
People often use this type of account once they have hit their contribution limit in their RRSPs and or TFSAs.
- When you open a non-registered account, we have to take a few extra steps to verify your identity as these accounts are not registered with the Canada Revenue Agency (CRA). We perform this extra step of verification to protect our clients' identities and for anti-money laundering (AML) purposes.
You can open a Save account or a non-registered investment account under your business’s name.
Frequently asked questions
- Should I open a TFSA or an RRSP?
If you’re not sure whether to contribute to a TFSA or an RRSP first, take a look at our guide: RRSP vs TFSA: What’s the Better Choice?
- Can I get further investment advice from Wealthsimple?
If you’re not sure which account is right for you, consider reaching out to our team of fiduciary advisors for help. You can book time with us here.