10 Questions
What is the main difference between GIC and a savings account?
GICs have a fixed term and money is guaranteed, while savings accounts are designed for saving money that you don't plan to spend right away
What is the key feature of a TFSA (Tax Free Savings Account)?
It is tax free when you withdraw money, and can be used for education purposes
What distinguishes RESP from other investment options?
It is designed for a child's post-secondary education and the government matches a certain amount of money
Why is it important to have an emergency fund as mentioned in the text?
To have funds available for unexpected expenses without having to touch other investments
What happens if you withdraw money from an RRSP before the age of 65?
There will be penalties for early withdrawal
What is the main advantage of contributing to an RRSP?
It reduces taxable income
What is a characteristic of mutual funds?
They allow pooling money to buy stocks, bonds, and other investments
What is the main feature of owning stocks in a company?
Potential for high rewards with high risk
What distinguishes bonds from stocks in terms of risk?
Bonds are generally lower risk compared to stocks
What is a consequence of not withdrawing money from an RRSP after the age of 65?
The bank will charge a fee for not withdrawing
Test your knowledge of RRSP, a retirement savings plan where contributions can reduce tax, but early withdrawals incur fees and penalties. It allows for tax-free growth and reduces taxable income, but requires mandatory withdrawals after age 65 with limited amounts.
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