OMG! Biggest freaking news of this decade!!!!

rdnicolas · #1 03-07-2008, 10:05 PM

I personally think GIC's are not for me because of the following:
1. The rates are usually not that high, plus you end up having to pay taxes on your gains even though you havn't touched it.
2. Depending on where you live (Alberta for me) the GIC's may not even offset inflation rates. Which effectively nulifies or makes your gains negligible. Plus you still have to worry about paying taxes opn those gains.
3. Many institutions try to get you to lock into a term
4. It adds to your taxable income at the end of the year whilst RRSP's reduce it (or at least defers it for later).

Although I haven't reviewed the restrictions on the new savings plan, I wonder if you open the savings account first and then invest it in a GIc if the gains end up being tax free... then my issues above are no longer applicable... For me I'd still put my money in Canadian real estate.
So far it seems the application of this new plan is endless!

Reggie

albert_dao · #2 03-09-2008, 12:05 AM

Don't ever buy GIC's. Banks laugh at you after you've purchased a GIC. They are the biggest ripoff on the market. End of story.

Pan · #3 03-09-2008, 04:41 AM

This new "tax free" savings is kind of a joke as well.

rdnicolas · #4 03-09-2008, 04:53 AM

Quote:

Originally Posted by 'Ol Nobodaddy

This new "tax free" savings is kind of a joke as well.

Actually it sounds like it can potentially be a huge money saver. Say for example you already are investing in stocks, mutual funds etc (not GIC's as I agree with Albert they're a ripoff) you can put the money through this savings account and then do the same thing. Now the growth is tax free. And you can also roll it over as the years go by. ie. for a couple years you don't start one but in the 2nd year you get a lump sum of money (i.e. a 10k bonus from work etc.) and if you decide to invest it you can use that vehicle to enjoy tax free growth. Of course if one doesn't do any investing at all it is useless. I'm still waiting for the Conservatives other promise of deferred capital gains though....