Accounts

Regular accounts

Cash

This is the simplest way to start investing. With a cash account, you can trade stocks, mutual funds and fixed income securities. Keep in mind that every trade must be settled (paid for) by the settlement date.

Settlement dates by security:

Security Settlement
Money market securities Same day
Options Same day
Government of Canada Bonds,
less than 3 years to maturity
2 business days
Government of Canada Bonds,
more than 3 years to maturity
3 business days
Zero-coupon bonds 3 business days
All other securities 2 business days

Margin

Need more flexibility? Margin accounts provide investors with the ability to purchase shares without necessarily having the funds for the full cost of the investment. This buying power is based on the cumulative loan value of the investments in the account, which in turn is based on each investment's value and quality. The amount is calculated using the market value of the securities already in the account and to be acquired. Thus, the buying power may fluctuate depending on the type and market value of the securities in question.

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Margin Option

With this type of account, you can perform any of the transactions in a conventional margin account, PLUS a variety of option strategies, such as:

  • Buying call and put options
  • Selling covered call options
  • Selling uncovered calls and puts
  • Long or short straddles (covered or uncovered)
  • Spreads
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Short-Selling

Short selling involves selling a security that you do not own. The premise behind this strategy is that you anticipate a decrease in the price of a stock and want to profit by selling the stock short and then buying it back later, at a lower price. This type of account is not intended for novice investors.

This speculative type of account requires up to 150% of the market value of the stock sold short in the account as margin (including the amount received from the short sale). Also, there is no interest paid on credit balances in the account. If dividends are declared on the stock while it is held short in the account, the short seller is responsible for paying the dividend.

Additional guarantees may be required before opening such an account.

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Registered accounts

RRSP (Registered Retirement Savings Plan)

Invest in Canadian and international securities tax free until withdrawal or age 71. An RRSP allows you to investments in the market and build capital for your retirement years. You can now trade US securities in your RRSP without worrying about currency conversions by opening a US plan.

Main Features:

  • Contributions are tax deductible.
  • Revenue generated is sheltered from taxes until withdrawal.
  • Annual administration fees may apply.
  • Contributions can be made in cash or in the form of securities.
  • Possibility for spouse to make contributions (with a spousal RRSP).
  • Eligible for automatic monthly contribution program
  • Canada Revenue Agency determines eligible investments for this type of account.

Possible Variations

Fixed Term Annuity: By designating a beneficiary, you can protect the assets in your RRSP against seizure. This product is particularly suitable for those who are self-employed or business owners.

TFSA (Tax-Free Savings Account)

The TFSA is a registered savings account that enables you to earn investment income tax-free. It is available to Canadian residents aged 18 and over. You can now trade US securities in a TFSA without worrying about currency conversions by opening a US plan.

Main Features:

  • Eligibility: All persons who are 18 years and over
  • Maximum annual contribution:
    2009 2010 2011 2012 2013 2014 2015 2016 2017
    $5,000 $5,000 $5,000 $5,000 $5,500 $5,500 $10,000 $5,500 $5,500
  • Unused contribution room can be carried forward indefinitely
  • Withdrawals of capital and income generated in a TFSA are not taxable
  • Contributions to the account, capital losses and interest paid on money borrowed to contribute to the account are not deductible from your taxable income
  • Eligible types of investments are similar to those eligible for a RRSP (some restrictions apply).

LIRA (Locked-In Retirement Account)

Changing employers throughout your career? LIRA accounts offer the option of transferring pension funds or funds from a retirement plan with a former employer to this type of account. However, no additional contributions may be made to the account and the funds cannot be withdrawn until retirement. You can now trade US securities in a LIRA without worrying about currency conversions by opening a US plan.

RRIF (Registered Retirement Income Fund)

A Registered Retirement Income Fund (RRIF) is one of the most flexible investment options for your retirement. A RRIF is a tax-deferred account that works in similar fashion as an RRSP – except, instead of making annual contributions, you receive income in your retirement years. In accordance with current tax laws, you must convert your RRSP to a RRIF by December 31 of the calendar year in which you turn 71 years old. Desjardins Online Brokerage calculates the amount of your minimal withdrawal according to the fiscal policies in effect.

Main Features:

  • Option to transfer from your existing RRSP account (shares, mutual funds, fixed income securities).
  • Capital gains and revenues generated are sheltered from taxes.
  • Automatic periodic instalments can be paid to the financial institution of your choice, according to your needs.

Votre carrière vous amène ailleurs? Vous pouvez transférer dans votre compte CRI les fonds qui sont détenus pour vous dans le régime de retraite de votre ancien employeur. Notez toutefois que vous ne pourrez pas verser de nouvelles cotisations dans ce compte et que les fonds transférés seront immobilisés jusqu'au moment où vous prendrez votre retraite.Vous pouvez maintenant négocier des titres américains dans un CRI sans vous soucier des conversions de devises en ouvrant un CRI en devise américaine.

LIF (Life Income Fund)

When you retire, you can convert your LIRA or your pension fund to a LIF account, according to the policies established by law. A LIF allows you to receive different instalment amounts.

Main Features:

Identical to a RRIF with the following exceptions:

  • There is a limit on the amount withdrawn per year (as prescribed by law).

RESP (Registered Education Savings Plan)

Want to set aside funds for your children's education? Capital gains and revenues generated in an RESP account grow tax-free. Furthermore, the government provides a grant of 20% on the first $2,500 of your annual contributions to an RESP.

Main Features:

  • The growth of this plan is accelerated by the Canada Education Savings Grant (CESG) and a tax exemption on investment gains and revenues.
  • It is not necessary to be related to the beneficiary.
  • The account must be opened before the beneficiary's 16th birthday in order to be eligible for a grant.
  • Contributions are not tax deductible.
  • The beneficiary can withdraw both the investment revenues and the grant starting the first year of post-secondary studies at an authorized educational establishment.
  • These sums will be added to the beneficiary's taxable income when they are transferred to them in the form of educational assistance payments (the beneficiary's tax rate will likely be less than the subscriber's).

Other accounts

Association of People

A group of people with a common interest, other than the making a shared profit between members, whose activities are aimed at promoting the study, defence and development of economic, social and moral interests of its members.

Investment Club

The following limits apply to investment clubs:

  • May only hold a cash account;
  • A non-resident may be a member of an investment club;
  • The club may have no more than 20 members.

Cooperative

A cooperative is a legal entity made up of persons or companies that have economic, social and cultural requirements. To meet these requirements, they combine to operate a business according to the rules of the cooperative.

Corporation

Entité juridique ayant une existence, une personnalité et un patrimoine autonome et distinct de ses actionnaires et qui possède des droits et pouvoirs déterminés par la loi sous le régime de laquelle elle a été constituée ainsi que par ses documents constitutifs.

Accounts for a Minor

You have the choice between an "in-trust account for a minor" in which holdings of the account belong to the child and an "account held in the name of a minor" in which holdings of the account belong to the parent.

Sole Proprietorship

An individual who uses an assumed name in the operation of a business which is run by the individual, using their own assets, without requiring a separate legal entity. The rights and obligations of the individual are indistinguishable from those of the business.

Proxy Mandate

When a person (the principal) becomes incapacitated and having previously signed a mandate in anticipation of their incapacity, the court must approve the mandate and the proxy appointed to administer the property of the principal under the terms of the mandate.

Trust

There are three types of trust accounts:

  • "Complex" Trust: The trustees have complete discretion to accumulate or distribute trust income or capital.
  • "Simple" Trust: All of the income of the trust must be distributed progressively (periodically throughout the year); the trust does not distribute the capital and does not provide for payments, their permanent segregation nor their use for charitable purposes. (The trust can not have a charity as the beneficiary, accumulate income or distribute capital.)
  • "Grantor" Trust: The grantor (or transferor) retains control of the income or capital, or both, so that, for the tax purposes, they are considered the owner of the capital and income. This is the case, in general, if the transferor or their spouse owns (at the date of transfer) more than 5% interest of the value of the transferred assets.

Private Foundation / Fabrique

A private foundation may either carry out its own charitable activities or provide funds to other qualified grantees. A fabrique is a group of clerics and laity responsible for administering church assets.

Non-Profit Organization

Any legal entity, public or private, that is not in the pursuit of profit to be shared between its members. An NPO must ensure that its capital is reinvested in its works and that none of its members can make withdrawals for personal use.

Partnership or Limited Partnership

Two or more physical or legal persons which operate under a common name. Assets of the partnership are separate from those of its partners. However, partners are responsible for all debts and obligations entered into by the partnership.

Estate

An estate brokerage account can transfer funds and assets from the account of the deceased to their heirs.

Guardianship / Curatorship

Before the age of majority, the assets of a minor are managed by their guardian. The assets remain the exclusive property of the minor. When the child becomes of age they can claim the assets held in the account. Parents are usually the guardians of their minor children. If the guardian is not a parent, they will require a copy of the court ruling or act of appointment naming them as guardian.