CANADA IMMIGRATION
TIPS TO HELP NEWCOMERS BUILD THEIR SAVINGS
Having a strong understanding of the available financial options can help set newcomers up for success in Canada. Image credit: LITOON DEV on Unsplash.
From NEWS CANADA
Moving to a new country means new challenges, experiences and opportunities, including financial ones.
As a newcomer to Canada, understanding your financial priorities and the options available to you can help you make informed decisions and build financial confidence as you settle in.
Here are four tips to help you start your financial journey in Canada.
1. Learn how your money is protected. In Canada, there are different frameworks in place that can protect your deposits.
Federal deposit insurance: Protects deposits in banks and other federally regulated institutions.
Provincial deposit insurance: Protects deposits in provincial credit unions.
Investor protection: Offers protection for other investments like mutual funds, stocks and bonds.
Each of these frameworks offers different coverage depending on the type of financial product and institution.
For example, the Canada Deposit Insurance Corporation (CDIC) is Canada’s federal deposit insurer and protects eligible deposits, such as cash, GICs and foreign currency, held at member institutions, up to $100,000 per category. Coverage is free and automatic, meaning you don’t need to apply. You can find a full list of their member institutions on their website.
2. Choose a financial institution that fits your needs. As your life in Canada evolves, so will your financial needs. When choosing a bank, consider whether it offers what you need today and in the future.
You can explore the bank’s various investment products, loans, credit options and account types offered, as well as whether they benefit from deposit protection.
You could also consider the services they offer to make dealing with them more accessible and convenient, such as multilingual services, advisor services or access to customer support when you need it.
3. Consider Canada’s various registered accounts. Canada offers several registered accounts that can be used for various financial goals. Each account has different benefits and uses at any life stage.
A Tax-Free Savings Account (TFSA) is a good choice for building your savings without paying tax. Many people use it for emergency funds, travel savings and long-term investing.
A First Home Savings Account (FHSA) is designed to help first-time home buyers save for a qualifying home purchase while offering tax advantages.
A Registered Retirement Savings Plan (RRSP) can help you prepare for life after your working years.
Contributions may provide tax benefits today, while helping you build financial security for the future.
You can find out more about registered accounts on the Government of Canada’s website, or by speaking with your financial institution.
4. Explore different financial products available to you. Ask yourself what you want from your investments and consider the various options available. Here are a couple of examples:
A Guaranteed Investment Certificate (GIC) is a low-risk option. It guarantees a specific interest rate while you own it, and repays your initial investment once the GIC’s term has ended.
A High-Interest Savings Account (HISA), sometimes called an investment savings account, lets you grow your money without locking in for a specific term. It offers higher interest rates than traditional savings accounts.
Having a strong understanding of your available financial options can help set you up for success as you build your new home in Canada.
You can learn more about how these financial products are protected and calculate your coverage at cdic.ca.