Frequently asked questions

A TFSA is a registered savings plan that lets taxpayers earn investment income tax-free inside the plan. Contributions, withdrawals and earnings on the plan aren’t taxable if you follow the rules.

Any individual (other than a trust) who’s a Canadian resident 18 years of age or older is eligible to open and contribute to a TFSA. Simplii Financial TFSA accounts aren’t currently available in Quebec.

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Not a Simplii client yet? Want a simple way to bank? Give us a call at 1-888-723-8881.

You can contribute up to $6,000 this calendar year (annual TFSA dollar limit), plus any unused contribution room from previous years starting in 2009 or the year you turned 18, whichever is more recent for you.

If you didn't contribute the full allowable amount each year since you were eligible, you can add the difference to your current year’s annual TFSA dollar limit. Plus, if you withdraw any amount from your TFSA, other than to correct an over-contribution, and haven’t re-contributed, you can add that amount to your next year's contribution.

If you don't know your TFSA contribution room, contact Canada Revenue Agency at 1-800-959-8281 or sign on to My AccountOpens a new window in your browser.. If you contribute more than your limit, you’ll pay a 1% per month penalty tax.

Learn more about TFSA contribution roomOpens a new window in your browser..

No, TFSA contributions aren’t tax-deductible. Interest earned isn’t taxed as income, as long as you don’t contribute more than your limit.

Yes. If you’re a Canadian resident, you can carry forward and use your unused contribution room indefinitely.

For excess contributions, you’ll pay a 1% penalty tax per month on the excess amount for each month the excess remains. Deliberate over-contributions may also be subject to more penalty taxes.

No, you don’t pay tax when you withdraw funds. Withholding tax doesn’t apply in most cases.

No, withdrawing funds from your TFSA doesn’t affect Canadian taxes payable or federal income-tested benefits.

Learn more about Tax-Free Savings Account (TFSA)Opens a new window in your browser..

An RRSP is a savings plan where your money can earn interest that’s tax-deferred until withdrawn. Each year you contribute to an RRSP, you may claim a deduction that could make you eligible for an income tax refund after filing your annual tax return.

An RRSP matures the year you turn 71. At that time, you can choose to take the RRSP proceeds as a taxable cash withdrawal or use them to purchase a registered annuity or a RRIF, or any combination of these.

Find your contribution limit on your Notice of Assessment. You can also call Canada Revenue Agency at 1-800-959-8281 or sign on to My AccountOpens a new window in your browser..

To withdraw funds from your Simplii Financial RRSP, give us a call at 1-888-723-8881.

Withdrawals from an RRSP are subject to withholding tax. Withdrawals made under the CRA Home Buyer's Plan or Lifelong Learning Plan aren’t subject to withholding tax.

The HBP is a Canadian government program that lets you withdraw funds from your RRSP to buy or build your first home. Restrictions apply. If you’re eligible, you can withdraw up to $25,000 in a calendar year.

Learn more about the Home Buyers’ Plan (HBP)Opens a new window in your browser..

The LLP lets you withdraw funds from your RRSP to finance full-time training or education for you or your spouse or common-law partner.

If you’re eligible, you can withdraw up to $20,000.

Learn more about the Lifelong Learning Plan (LLP)Opens a new window in your browser..

Any person with Canadian-earned income under the age of 71 and who has filed a tax return can contribute to an RRSP, up to the annual limits in the Income Tax Act.

You must be a Canadian resident to open a Simplii Financial RRSP. They’re currently not available in Quebec.

To transfer your RRSP to Simplii Financial, give us a call at 1-888-723-8881 or complete and mail the Transfer Authorization for Registered Investments (standard transfer) (2033) (PDF, 220 KB) Opens a new window in your browser..

A GIC is a secure investment product, where both the principal and interest are guaranteed for the term of the investment at a competitive interest rate.

GIC deposits are eligible for deposit insurance from CDIC, subject to maximum coverage limitations. For more information, go to CDICOpens a new window in your browser..

When your GIC matures, add to the amount you invested by buying a new GIC. You can’t contribute to an existing GIC.

A laddered plan can be an easy way to help maximize GIC returns while maintaining a secure portfolio. This method of investing (also known as a laddering strategy) can help reduce the risk of interest rate fluctuations and potentially increase your portfolio's overall return. You do this by splitting an investment equally over all GIC terms (1 to 5 years).

To learn more about GIC laddering, go to Simplii GICs.

Typically, you can only access your GIC when it matures. You can redeem registered GICs before maturity in a few situations:

• To participate in the Home Buyers' Plan
• To participate in the Lifelong Learning Plan
• Due to extreme financial hardship (subject to approval)

GICs are eligible for deposit insurance from CDIC up to $100,000. For more information, call CDIC at 1-800-461-2342 or go to Canada Deposit Insurance CorporationOpens a new window in your browser..

An RESP is a registered education savings plan that lets you contribute a lifetime maximum of up to $50,000 per beneficiary. You can contribute to an RESP for up to 31 years, and the plan can stay open for up to 35 years.

Unlike an RRSP, your contributions to an RESP are not tax-deductible. But, the investment income you earn is tax-deferred until you withdraw it.

When you withdraw any income or government assistance from the plan to pay for the beneficiary’s education, it’s taxed at the student's tax rate. That tax rate may be lower than the contributor’s tax rate.

Tax-deferred growth: Although your contributions aren’t tax deductible, all investment income generated in the RESP is tax deferred while it remains in the plan.

Tax savings: When you use plan income and government assistance to pay for the beneficiary’s post-secondary education, it’s taxed to the beneficiary. The beneficiary may pay little or no taxes on the money if they have little or no taxable income.

Government assistance: You may qualify for grants or assistance.

The beneficiary named in the RESP needs a Social Insurance Number to receive a Canada Education Savings Grant.

For an RESP mutual fund account comprised of individual funds, government assistance is paid monthly and deposited directly to a CIBC Money Market Fund. For an RESP mutual fund account comprised of a portfolio, government assistance is paid monthly and allocated proportionately to the various mutual funds in the portfolio.

Learn more about the Canada Education Savings GrantOpens a new window in your browser.

You may qualify for several savings incentives from the government.

Basic Canada Education Savings Grant (CESG):

• The federal government contributes an extra 20% on the first $2,500 contributed every year ― an extra $500 per year ― up to a maximum lifetime grant of $7,200 per child

Additional Canada Education Savings Grant:

• Families that qualify based on income can receive an additional CESG from the federal government
• Families with a net household income of $46,605 or less are entitled to an additional 20% grant on the first $500 of RESP contributions
• Families with a net family income of more than $46,605, but not more than $93,208, are entitled to an additional 10% grant on the first $500 of RESP contributions
• These numbers are based on 2017 income brackets. Income brackets are updated yearly

Canada Learning Bond (CLB):

• The CLB is available for children born after January 1, 2004, if their family income doesn’t exceed certain thresholds, which vary depending on the number of children in the family
• The CLB provides an initial $500 after the RESP is opened, and up to 15 annual CLB payments of $100 for each subsequent year the children's family receives the National Child Benefit supplement
• All CLB payments are deposited directly into the RESP account
• The maximum CLB available for a beneficiary is $2,000 and can’t be shared with other beneficiaries

Any family member, friend, relative or guardian can open an RESP for a beneficiary. Each beneficiary must be a Canadian resident and have a Social Insurance Number (SIN).

In all cases where the beneficiary is under the age of majority, the primary caregiver (usually the parent or legal guardian of the child) must sign forms required by Employment and Social Development Canada (ESDC). It administers the government assistance for RESPs. If the beneficiary is over age 18, the beneficiary must sign the ESDC forms.

Minimum: To open a Simplii Financial RESP, you can either contribute $25 a month or $500 as a lump sum.

Maximum: The lifetime RESP contribution limit is $50,000 per child. There’s no annual maximum contribution limit. There may be restrictions based on the plan type and the beneficiary’s age.

Yes, you must provide a Social Insurance Number for the beneficiary (child) named in the RESP. This is also required to receive government assistance.

Family plan RESP: You (the subscriber) can name more than one child as a beneficiary of the plan. But, all beneficiaries must be your child, grandchild, great-grandchild or sibling, by birth or adoption. If the child for whom the plan was originally intended doesn’t go to post-secondary education, another child named in the plan can use the funds.

Individual plan RESP: You (the subscriber) can name only one child as the beneficiary, and the child doesn’t have to be related to you.

If you have a family plan, you can use the earnings to pay for the education of another child named in the plan. With an individual plan, you may have the option to name another beneficiary. But, you may need to return any government assistance.

If no beneficiary pursues higher education, you may be able to transfer up to $50,000 of accumulated income earned in the plan tax-deferred from the RESP to your RRSP. You must meet certain conditions to qualify:

• You must be a Canadian resident
• Your normal RRSP contribution limits apply. If you don’t have enough RRSP contribution room, you may be able to withdraw plan earnings. But, restrictions and additional taxes may apply
• The RESP must have been in effect for at least 10 years and all RESP beneficiaries must be at least 21 and not currently seeking higher education. Or, all beneficiaries are deceased

You can always get back your own plan contributions that you haven't withdrawn. But, any government assistance in the plan is returned to the government and can’t be transferred to your RRSP.

To open a Simplii Financial RESP account and to receive government assistance into the RESP, the child named in the RESP needs a Social Insurance Number.

The lifetime RESP contribution maximum is $50,000 per child.

If there’s more than one RESP for the same child, the total contribution amounts contributed for the child (including every contributor and every plan) can’t exceed the lifetime maximum allowed.

For the Simplii Financial mutual fund RESP, government assistance is paid monthly and deposited directly to CIBC Money Market Fund. You can then change how that amount is invested in the usual way. Any government assistance paid into an index portfolio rebalancing service account is allocated proportionally to the various mutual funds in the portfolio.

For more information about RESPs, give us a call at 1-888-723-8881.

A RRIF is a tax-deferred account that provides owners (annuitants) a source of retirement income. It generates income from the savings accumulated under an RRSP or a registered pension plan.

You can only transfer property to a RRIF from an RRSP, a registered pension plan or from another RRIF. A RRIF is one of the choices available when you pick a retirement income option for your RRSP. In addition to a RRIF, you can also choose a taxable cash withdrawal, a registered annuity or any combination of these.

One of the most common options is to transfer your RRSP to a RRIF. This lets you benefit from continued tax deferral on the growth of your RRSP assets.

You can establish a RRIF anytime, but no later than the year you turn 71. Once you establish a RRIF, minimum annual payments must start coming out the next year.

Your choice depends largely on the type of current retirement plan you hold. RRSPs are most frequently converted to a RRIF, to maximize continued tax deferral.

You’ll get a minimum amount annually from a RRIF. The financial institution that holds the RRIF calculates that amount as required by the Income Tax Act based on your age when you open the RRIF.

The payments can also be calculated based on the age of your spouse or common-law partner. Before the first minimum payment is made, you must decide whose age to base the minimum payments on. You can’t change it after that.

A LIF is a RRIF that holds locked-in pension funds, funds that came from a registered pension plan Locked-In RRSP, or a Locked-In Retirement Account.

LIFs pay out the annual RRIF minimum. But, they also have maximum annual payments and other features based on the pension law for the locked-in funds.

A LIF is also known as a Locked-In Retirement Income Fund (LRIF) in Newfoundland and Labrador.