Accounts

Accounts for all your needs

A brokerage account is an investment account that allows you to implement your own investment strategies on different financial products.

There are important differences between bank and brokerage accounts, the most significant being the use of the account. While a bank account is designed to deposit and withdraw money frequently, a brokerage account is designed to deposit funds with the intent to invest in the markets.

A direct brokerage account allows you to manage your own funds by selecting the products that meet your investment objectives. For a self-directed investor, a discount brokerage account is much more attractive, given the low annual fees and commissions, compared to any other type of brokerage service. Furthermore, with an online brokerage account, you can tap into a multitude of tools and research papers to help you build your investment strategy.

There are several types of brokerage accounts. The table below lists the different accounts available at National Bank Direct Brokerage, along with their key characteristics. Click on each account to learn more!

Type of account  Advantages
Characteristics 
Cash account

Options trading

No minimum or maximum deposit required

Allows trading of over-the-counter products (pink sheet)

Obligation to declare any gain or loss in the account as well as any income earned from it (interest, dividends, etc.)

In Canadian or US currency 

Margin account 

Same advantages as the cash account, plus:

Possibility to borrow margin based on the current market value of the security and the percentage of the loan available per security. It is a dynamic margin: if the market value of your investments increases (drops), your borrowing power increases (drops).

Possibility of short selling and option spreads 

Same characteristics as the cash account, plus:

Highly competitive annual borrowing rate

Allows for tax deductibility of loan interests

No margin reimbursement deadline: as long as your margin is sufficient, you are not required to transfer funds or to sell securities to cover your debit balance

Flexibility: use the margin for your personal projects or to reimburse a debt with a higher interest rate 

In Canadian or US currency

RRSP

Allows to set up a financial plan for retirement

Possibility to trade options

Available in Canadian currency (with the possibility to trade on US markets) 

Tax deduction for RRSP contributions, in accordance with the current regulations

Funds grow sheltered from taxes (no need to declare capital gains or losses, or income earned in the account)

Allows you to take advantage of different government programs (HBP and LLP)

In Canadian or US currency

RRSP (spousal)  Same advantages as the RRSP account, but the spouse is the contributor of the account and thereby can use the tax deductions associated with the contributions

Same characteristics as the RRSP account

Allows you to implement an income-splitting strategy

The contributions belong to the receiving spouse 

In Canadian or US currency

LIRA and Locked-in RRSP  Allows management of funds from a pension plan
Funds grow sheltered from taxes (no need to declare capital gains or losses, or income earned in the account)

In Canadian or US currency

RRIF 

Extension of the RRSP, the RRIF is a disbursement account in which gains and income grow tax free (The RRSP must be converted into a RRIF during the year in which you reach 71, at the latest)

A minimum amount that must be withdrawn from the account is calculated each year. There is no maximum.

For calculation purposes, it is possible to use the age of your spouse to reduce the annual payouts.

Possibility to earn a return on your investment while you progressively withdraw funds 

Access to a large array of fixed income products

Possibility to change the payout amounts each year

Payout flexibility (withdrawals can be made monthly, quarterly, semi-annually or annually)

Retirement payments may be requested in cash or in kind

To ensure that retirement payments requested in cash will not put the account in debit, sufficient liquidity must be available in cash when the payment is scheduled

LIF  Same benefits as the RRIF, but there is a maximum payout amount Same characteristics as the RRIF account
RESP 

Encourages savings for your children’s postsecondary education

Access to federal and provincial (Quebec, Alberta) grant programs

Two types of accounts: family or individual plans

20% return on contributions (federal grant)

Depending on your family income, it may be possible to receive additional government grants

Your investment returns grow tax free

Most grants can be split between the beneficiaries of a family plan

Possibility to contribute up to $5,000 per child per year to make up for lost contributions over previous years

 RDSP The Registered Disability Savings Plan (RDSP) helps individuals with disabilities and their families save for the future and achieve long-term financial security. Plan beneficiaries must be eligible for the disability tax credit.

Contributions to the plan may be supplemented by government grants up to $70,000 and bonds up to $20,000.
The government provides grants and bonds to eligible persons to help them grow their savings faster.

Unused grants and bonds can be carried forward for up to 10 years.
Contributions are not tax-deductible, but investment growth is tax-sheltered until the funds are withdrawn.

The overall lifetime contribution limit is $200,000 per beneficiary. Contributions are permitted until the beneficiary turns 59.

Withdrawals may be made for any purpose.
TFSA To grow your savings tax free (maximum contributions of $5,000 per year from 2009 to 2012, $5,500 for 2013 and 2014, up to $10,000 for 2015 and since 2016, $5,500 per year)

Accumulation of unused contributions over time (e.g., if in 2012 you only contributed $2,000, a contribution room of $3,000 will be added to the maximum contribution allowed in 2013.)

Reinvestment of withdrawals from previous years (e.g., if in 2012 you withdrew $1,000, you will have the right to reinvest this sum in 2013: $5,500 + $1,000 = $6,500 in 2013)

Possibility to withdraw sums at any time, without tax consequences

In Canadian or US currency

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