Taxable Accounts, Explained - How To Invest Using a Non-Registered Investment Account

If you're looking into which investment account to use, you'll likely hear about tax-advantaged, or registered, accounts first (which is a good thing!) - these accounts give you tax benefits, incentivizing you to invest your money. There's both tax free accounts (like the TFSA in Canada, or Roth IRA in the United States), and tax deferred accounts (like the RRSP in Canada, or 401k in the United States).

Most of the time, it makes sense to use tax-advantaged investment accounts first. But, what do you do when you 'max out' those accounts?

Luckily, there's also 'taxable', or 'non-registered', investment accounts, too. They don't provide any tax benefits, but you can invest an unlimited amount of money, and withdraw your money whenever you'd like to. We explain what that means, and everything you need to know about taxable accounts, in this video!

0:00 What is a Tax-Advantaged Account?
1:54 What is a Taxable Account?
3:17 How do taxes work for Taxable Accounts?
4:40 How do you open a Taxable Account?
6:15 When should you use a Taxable Account?

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Disclaimer - This content is for education and entertainment purposes only. Steph & Den do not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.

[stephandden]

What investment account(s) do you use? Let us know! 👀

[supernumex]

The nitty gritty on the Canadian taxable accounts would be appreciated. It's a deep rabbit hole and there's lots to think about. I've been able to mostly piece it together from many different sources, but I think it would help a lot of Canadians if you guys can cover it a series of videos. In no particular order: superficial loss rules, carrying forward/backward capital losses, tax loss harvesting, ACB tracking (Return of Capital and Reinvested Capital Gains Distribution adjustments for ETFs), foreign tax credits. 😃

[utooberrookie]

Great to see Canadian personal finance topics discussed by people NOT wearing suits and ties. One suggestion for future videos: Leave the American content out of it. They have their own gurus, let'em have theirs.

[kurosetsuna]

One thing to note about the RRSP tax deduction is that you can choose to not use it in that year and keep it carried forward to a future year you choose to apply it. So in that way it is still better to invest into RRSP first over a taxable account. Thanks for the videos, love watching these, keep up the good work.

[TheTraveller]

I used to think that getting rich was some combination of black magic and pure luck but now I know its actually a science that can be learned like physics and chemistry. Great Job on the simple and understandable channel to teach this important skill!

[tmlocas]

Thanks to both of you for those educative videos.
Actually I am 42 and my TFSA is maxed out and in the 6 digits now. My RRSP is maxed out as well since the past 2 years. I own a house since 2017 so FHSA is not an option. But I still improved my strategy because of you and I am just a new WealthSimple customer and XEQT investor.

[nobee]

Love seeing Canadian financial topics. A couple suggestions, it would be great if you left American financial stuff out of this. It’s hard to find good, 100% Canadian financial advice on YouTube. Another would be use canadian dollars in your videos instead of the American bills! We’re canadian! Let’s use our Monopoly money 💰

[BryanSmith-zekb]

It's great to see more Canadian financial planning content arriving, great stuff! I would maybe slow down the speed of the deliverable content. Most Canadians struggle to understand the intricacies of our registered vs non registered investment/savings protocols. RRSPs, TFSAs, RESPs, RDSPs, FHSAs are not an ordered ranking, they are designed to be used as one cohesive unit, all dependent on your financial goals and needs. I am not saying that all programs need to be utilized at one time, but before using them and in order to maximize them, it might be important to stress the need of speaking to a financial planner. Proper financial planning involves the client being vulnerable, sharing their goals, displaying their personal income & expenses and ultimately checking off every other question on their mind. I think the use of some icons, tables and explanations related to these programs and the savings obtained by the use of the programs could help people understand more. This is my advise as a financial planner currently managing 70 households. Keep it up!

[MichaelIreland]

One thing y'all should discuss is how all of thes accts behave regarding taxation once you become a non-resident. This is applicable to retirees and globe-trotters.

[Jibril_Abdulkadir]

Right now at the moment I use a non taxable account TSFA but possibly in the future would use a taxable account great vid guys 🔥

[felipebresquiliari]

Hello Steph and Den, great content! Keep the good work!
I have a question regarding the TFSA: lets say I have 30k of contribution room in the account but the limit per year is only 7k, can I contribute until I max out the 30k or I can only contribute 7k limit for 2024?

[imaginosdesdinova]

I guess If I don't see myself living in Canada in the next 3-5 years make sense after maxing out TFSA go direct to unregistered acc...

[bradv.]

Thank you for taking the time to make such a great video. If you pay corporate tax on your earnings as a professional, and then with these after tax earnings purchase mutual funds in a corporate non registered account which produce a monthly dividend which you later pay taxes on even when you leave them in the non registered account, can you later transfer the amounts of these same dividends out of the corporate non registered account into a personal bank account with no tax implications ? Thank you.

[calvinsmith]

In a non registered account do you pay capital gains on an investment that you haven't sold? Ie if a stock gains money throughout the year but you haven't sold it, do youbstill pay tax on the amount it gained by?

[sookiesleepsalot]

My fiancé and I are considering a prenuptial agreement. We have similar assets. What are you thoughts on prenups when both parties have similar assets but different inheritances? ❤ thanks!!!

[alexanderwlad]

Do you pay taxes when you sell a stock or when you pull money out of the account? What if you sell and reinvest in another stock?

[mijuM]

Would it make sense to put money into your partners Registered Accounts if you have already maxed all of yours up vs opening a taxable account?

[cheungsamson]

Thanks for your sharing. However, 18% of $50, 000 wouldn't that be $9, 000? thx

[obesia]

I'm about to invest in taxable accounts but Im considering saving that money to pay more of my mortgage's principle instead

[marq]

What are the tax implications for a beneficiary (child) at death of the account holder?