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Following is an at-a-glance outline of the various accounts available at ScotiaMcLeod Direct Investing:
Non-Registered Accounts
- Cash Accounts
- Margin Accounts
Registered Investment Plans
- Self-Directed RSPs
- Self-Directed RIFs
- Self-Directed RESPs
There are four simple ways to open a ScotiaMcLeod Direct Investing® account:
Non-Registered Accounts
You can open the following non-registered accounts through ScotiaMcLeod Direct Investing for yourself, jointly with another individual, on behalf of an estate or investment club, in trust for someone else, or for non-personal investments.
Cash Accounts
This is the most common type of account and is meant for investors who intend to pay cash for every purchase.
Margin Accounts
With a margin account, you can borrow additional capital and benefit from more trading flexibility. For instance, you can either pay for each trade or you can buy margin-eligible securities on credit. In that case, you pay only a portion of the full transaction cost and borrow the balance from ScotiaMcLeod Direct Investing at a competitive rate.
By using this borrowing capability, you can react quickly to market opportunities without having to worry about finding the cash to cover the transaction. If you want to trade options or sell securities short, you must have a margin account.
Registered Investment Plans
Depending on your age or stage in life, ScotiaMcLeod Direct Investing offers various types of registered plans to help you meet your financial objectives.
Self-Directed RSPs
Self-directed RSPs offer a combination of flexibility, convenience, and choice to investors who are seeking to control their retirement savings investments, while enjoying the tax-deferral benefits of registered plans. Plus, when you manage your RSP through a ScotiaMcLeod Direct Investing account, you have access to our full complement of investment research tools and expertise.
With your self-directed RSP at ScotiaMcLeod Direct Investing, you can:
- Hold a wide array of RSP-eligible investments, including Canadian and U.S. equities, mutual funds, options, precious metals certificates, and fixed income vehicles such as government and corporate bonds.
- Consolidate and manage all aspects of your RSP investing at your convenience, including contributions, transactions, dividend and income collection.
- Contribute regularly to a mutual fund through our automatic Pre-Authorized Contribution program. Frequency and minimum amounts vary depending on the mutual fund.
- Pay no fee with a minimum account size of $25,000. For accounts of less than $25,000, an annual administration fee applies.
ScotiaMcLeod Direct Investing also offers Locked-In Retirement Accounts (LIRAs) and Locked-In Retirement Savings Plans (LRSPs).
Self-directed RIFs
As long as you have "earned income", you can contribute to your RSP until December 31st of the year you turn 69. At that point, you have three options. You can set up an annuity, receive the proceeds of your RSP as a lump sum and they will be included as taxable income for the year, or you can transfer the funds to a Retirement Income Fund (RIF).
If you transfer your savings to a RIF, you direct a specified amount to be transferred out of your registered account on a regular basis (monthly, quarterly, semi-annually, or annually). The funds you withdraw are subject to income tax and the annual minimum payment amount is dictated by federal legislation. However, you continue to defer the taxes payable on the funds that remain in your RIF. Plus, you retain control over how that money is invested.
When you choose to transfer your RSP savings into a self-directed RIF at ScotiaMcLeod Direct Investing, you can:
- Access a broad assortment of RIF-eligible investments
- Achieve diversification among your assets
- Receive one consolidated statement
- Meet minimum payment requirements in a convenient and flexible way
Self-directed RESPs
As a complementary investment choice, ScotiaMcLeod Direct Investing offers Registered Education Savings Plans (RESPs).
If you plan to help finance your children's or grandchildren's post-secondary education, you may want to consider investing in an RESP as it offers an excellent way to save for future education costs, while benefiting from certain tax-deferral features.
Here's how RESPs work:
- The lifetime maximum contribution per child is $50,000 – no annual maximum contribution limit.
- Through the Canada Education Savings Grant (CESG) program, you receive 20% on the first $2,500 you contribute to your RESP each year, to a maximum of $500 annually (additional Grant amounts may be available depending on family income).
- The contributions you make to your RESP are not tax-deductible, but your investment grows on a tax-deferred basis until the funds are withdrawn (usually by the beneficiary you name who will likely be in a lower tax bracket).
- ScotiaMcLeod Direct Investing currently processes eligible regular Canada Education Savings Grant (CESG) payments but may not process Canada Learning Bond, additional CESG, or certain provincial education savings grant payments related to RESP accounts.
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