Which account type should new investors choose to invest in? And which account type should experienced investors choose to prioritise? This article can help you make that choice.
Canadian investors can choose to invest via a variety of different accounts. These include: Tax Free Savings Accounts (TFSA), Registered Retirement Savings Accounts (RRSP), Registered Education Savings Accounts (RESP), traditional taxable investment accounts and the new First Home Savings Account (FHSA).
Which of these you should start with or add to depends greatly on your income level because that determines your marginal income tax rate and it depends on whether you will be a first-time home buyer, whether you have children under the age of 18, whether you have a work-place pension and other factors.
Here’s some guidance for Canadian investors:
If you plan to buy a house within the next 15 years and if you will qualify as a first-time home buyer then the FHSA should probably be your top priority.