Types of Accounts

At Odlum Brown our investment accounts (frequently referred to as “cash” accounts) allow you to trade stocks, bonds, mutual funds and other types of securities, depending on your investment goals. Your investment accounts may be denominated in either Canadian or U.S. dollars, and may include margin or options trading services.

Accounts can also be designated as “in trust for a minor” child. The minor child is the beneficiary of the account until they reach the age of majority, at which time they become absolutely entitled to the assets in the accounts.

Registered Retirement Savings Plans (RRSPs) are designed to help Canadian residents accumulate wealth for their retirement.

Benefits of an RRSP

• Within limits, contributions to the plan are tax deductible.
• Contributing monthly or yearly may reduce the amount of tax you pay on your income.
• Money grows tax-free until it is withdrawn as cash, or after it has been rolled into an annuity, Life Income Fund (LIF) or a Registered Retirement Income Fund (RRIF).

The Self-Directed RRSP. A self-directed RRSP is the most flexible and diversified retirement savings vehicle available. An Odlum Brown self-directed RRSP provides the ability to diversify your portfolio by selecting from a variety of investment instruments including equities, fixed income, mutual funds, and GICs.

Contact your Investment Advisor or Portfolio Manager for more information on other eligible investments.

Let Time Do The Work: Invest Early, Invest Often. The sooner you start saving and investing in your RRSP, the more fruitful your retirement. Making contributions early in the year or on a monthly basis means more savings.  Your investments and returns are allowed to compound tax-free.

It is never too late to start investing.  You have up to the first 60 days in the following year to make your annual contribution for the current tax year.

Odlum Brown Limited Can Help.  When you retire, you embark on a new stage in life. Your satisfaction, however, depends on the financial planning you undertook before retirement. Please contact your Odlum Brown Investment Advisor or Portfolio Manager for more information.

Your RRSP will mature by December 31 of the year in which you turn 71. At this point, no new contributions can be made and you must begin to withdraw money from the plan.

Deciding how you will turn your RRSP funds into income is one of the most important retirement decisions you will make. At Odlum Brown we offer several RRSP maturity options including Registered Retirement Income Funds (RRIFs), Life Income Funds (LIFs), Locked-in Retirement Income Funds (LRIFs) and cash.

Registered Retirement Income Funds (RRIF). The most flexible RRSP maturity option is to transfer RRSP assets to a self-directed RRIF. A RRIF is essentially an extension of your RRSP as you can hold virtually all of the same investments, have the same amount of control and continue to enjoy the benefits of a tax shelter. The difference between the two is that an RRSP is used for the accumulation of funds and a RRIF is used for annual withdrawals.

Government regulations stipulate the minimum amount you must withdraw each year.

A self-directed RRIF allows you to periodically reassess your income needs. Within certain guidelines, it also allows you to control the amount you withdraw. For instance, you may withdraw a lump sum to buy a new car or to make a charitable donation. With this flexibility, you can safeguard against unforeseen circumstances and make the most of current opportunities.

Life Income Funds (LIF) or Locked-in Retirement Income Funds (LRIF).  Life Income Funds (LIF) and Locked-in Retirement Income Funds (LRIF) are tax-deferred investment vehicles available to investors who wish to convert their Locked-In RRSP accounts to income. Similar to RRIFs, Odlum Brown LIFs and LRIFs can be held on a self-directed basis with the same type of investments.

The mechanics of a LIF or LRIF are very similar to those of a RRIF, with one notable exception. In addition to a minimum withdrawal requirement, there is a maximum withdrawal allowed each year. LIFs and LRIFs are governed by the underlying pension plan which may have other restrictions such as requirement to purchase a life annuity at a certain age.

Annuities. An annuity is an insurance-based vehicle designed to provide guaranteed and steady income on a monthly, quarterly or annual basis. These products are available through the firm’s wholly owned subsidiary, Odlum Brown Financial Services Limited. For more information, contact your Odlum Brown Investment Advisor or Portfolio Manager.

A Tax-Free Savings Account (TFSA) allows you to accumulate savings faster than you would in an ordinary investment account, as interest, dividends and capital gains are not taxed when earned or withdrawn. This type of account is suitable for long-term investment goals while at the same time provides flexibility for unexpected short-term withdrawals without penalty.

Canadian residents, who have reached the age of majority in their respective province or territory of residence, and who have a social insurance number, may open a TFSA.

A wide range of investments can be held in a TFSA, including cash, mutual funds, publicly-traded securities, GICs, and government and corporate bonds.

Post-secondary education is expensive and the costs continue to rise. There are easy ways to help plan for these educational expenses. Investing early helps reduce the financial pressure when the time comes to start a post-secondary education. You can open a plan for your child, grandchild, young friend or family member.

An RESP is an investment plan designed to help you save money for your child’s post-secondary education. It allows you to make contributions until the funds are needed to pay for post-secondary expenses. RESP contributions are not tax deductible; however, income and growth remain tax sheltered until withdrawn. In addition, you may be eligible for the Canada Education Savings Grant (CESG). 

Designed specifically for corporations and other organizations, this account offers the same benefits as our regular Investment Account. Investments held in Corporate Accounts can include mutual funds, stocks, bonds, GICs, and other securities. Corporate Accounts can be denominated in both Canadian and U.S. Dollars.

Buying your first home can be quite a daunting task. This is why the tax-free First Home Savings Account (FHSA) was introduced to help you achieve your financial goals.

The FHSA allows you to make tax-deductible contributions, earn investment income tax-free and make withdrawals tax-free for the purchase of your first home.* FHSA amounts can also be transferred without tax to an RRSP or RRIF, without using RRSP contribution room.

Canadian residents, who have reached the age of majority in their respective province or territory of residence, who have a social insurance number and who are eligible as first-home buyers, may open an FHSA. To be considered a first-time buyer, you or your spouse or common-law partner must not have owned your residence during the calendar year prior to opening a FHSA, or in any of the previous four calendar years.

A wide range of investments can be held in this account, including cash, mutual funds, publicly-traded securities, GICs, and government and corporate bonds. Speak with one of our Investment Advisors or Portfolio Managers to see if this type of account is suitable for your overall investment strategy.

*Subject to regulatory requirements.

A Registered Disability Savings Plan (RDSP) is a savings plan designed to help prepare for the long-term financial security of a person eligible for the disability tax credit due to a severe and prolonged mental or physical impairment. Similar to an RESP, within limits, contributions can be made to the plan by the beneficiary or other family members or persons. Plans can also receive government assistance from grants and bonds.

RDSP investments, grants and bonds grow tax-deferred until withdrawn for a beneficiary. Withdrawals from RDSP contributions are non-taxable while the taxable portion of RDSP withdrawals is excluded when calculating income for most income-tested credits and benefits, such as Old Age Security (OAS), the Guaranteed Income Supplement (GIS), the age amount credit and other benefits. However, a few provinces use RDSP income (never RDSP assets) to test eligibility for provincial disability benefits.*

Odlum Brown can help. Speak with one of our Investment Advisors or Portfolio Managers to see if this type of account is suitable for your family’s financial goals.

* As of August 2023, these provinces were Quebec, PEI and New Brunswick.

Whether established during your lifetime or through your will, a Trust Account allows you to protect and manage your trust’s assets with the features of a regular Investment Account. Trust Accounts are frequently used for estate planning purposes. Trust Accounts can be denominated in both Canadian and U.S. Dollars.

An estate account can be a simple way to settle large and small estates. These accounts combine the features of regular Investment Accounts with the special services you need as an executor, to help manage and distribute an estate’s assets. Estate Accounts can be denominated in both Canadian and U.S. Dollars.