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Figuring out where and how to pay taxes as an expat from Canada is just one of many things you must do if you move abroad for work. Statistics Canada estimates that 4 million working, retired and studying Canadians live outside of Canada. But before packing your bags, make sure you do some proactive financial and tax planning by consulting experts who can guide you.  Do I pay taxes in Canada if I move abroad? Well, that depends. Brenda Hiscock, a certified financial planner with Objective Financial Partners in Markham, Ont., helps her clients understand what they need to do financially in Canada before leaving the country.  One of the first steps: Determine your tax residency either with the help of a professional accountant or by filing an NR73 with the Canada Revenue Agency (CRA). Absences of less than six months typically do not affect residency. “If you’re planning on leaving Canada with an indefinite return day for any longer than six months, you should strongly consider working with an expert to figure out what type of tax reporting is required and whether you meet the criteria to be a non-resident,” says Hiscock.  It’s required for Canadians to file a tax return when they’re leaving Canada and becoming as a non-resident, says Hiscock. “If the move is permanent or has an unknown return date, it is likely that the date of non-residency is the date that you depart from Canada, or the date your spouse departs, if you’re leaving separately. In some cases, it may be based on the closing date of your home if it is being sold,” she explains.  Your residency status is based on several factors, including residential ties with Canada and the length of time away, purpose of the departure and intent and continuity of the stay while living inside and outside Canada. When leaving Canada, CRA checks these main things:  Where you reside  Where your spouse resides Where your dependants reside “If the answer to those three questions are that you are all habitually residing outside of Canada on a permanent/long-term basis then you are likely to be considered a non-resident.” Hiscock says to check with the CRA for other factors. If you and your family move out of Canada, but you’re leaving an empty house behind that you own but aren’t renting out, this creates a “grey area,” cautions Hiscock. “In some cases, you may continue to be considered a ‘deemed resident’ or ‘factual resident’ of Canada.” Again, getting professional support and advice is strongly recommended in these cases. (You may also need to change your home insurance for a vacant house.) Expect to file two tax returns in your first year abroad: Your exit tax return in Canada, which covers the period up until the date you left, and a tax return in your new country of residence as of the date you arrived there. Not sure whether your move is temporary or permanent? Consult with a financial planner or accountant to help you ensure that you’ve properly assessed your status, adds Hiscock.   “Once you are a non-resident, and have established residency in another country, you are generally no longer required to file a Canadian tax return unless you continue to earn Canadian-sourced income, such as a disposition of a property in Canada while being a non-resident.” What is a departure tax? Becoming a non-resident can result in an exit tax—also known as a departure tax—on capital gains on non-registered investments in the year you leave Canada. You’ll need to complete a T1243 form if you’re deemed to have disposed of certain types of investments. Hiscock says that if you leave Canada and sever ties by becoming a non-resident, “CRA says, ‘OK, we’re going to act as if you sold your assets, and we’re going to tax you on any gain at the time of your exit.’” Principal residences, registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs), first home savings accounts (FHSAs) and registered education savings plans are all exempt from the departure tax. But you’ll pay tax on any gains from non-registered assets and private company shares. In some cases, the departure tax can be deferred. Hint: check with a planner. Here’s an example of departure tax on a non-registered investment: “If I bought a stock for $100,000 that’s now worth $200,000, then I have an unrealized capital gain of $100,000. If I leave Canada, the CRA will tax me on that $100,000 gain,” says Hiscock. (Capital gains taxes can be confusing, but here’s an explainer: Capital gains tax, explained) What happens to my registered accounts and pension income as an expat? The income you earn from registered accounts or your pension is treated differently when you move abroad, explains Hiscock. “In Canada, all the growth on our TFSA is tax-free, but that’s not the case in other countries,” says Hiscock.  Canadians often go abroad and think the growth in their TFSA continues to be tax-free. “In Italy and the U.S. and most other countries that tax on worldwide income, the growth may be taxed, so it’s important to notify your tax preparer in your new country of residence if you keep your TFSA,” she says. She adds that RRSPs are viewed as tax shelters in most countries where Canada has a tax treaty—but never assume anything. A planner from your new country of residence can help you make decisions that best suit you and your finances. Also, earning income in Canada can be tricky too. Say you leave Canada as a non-resident and you make an RRSP withdrawal or earn Canada Pension Plan (CPP), Old Age Security (OAS) and/or dividend income; this money would be subject to withholding taxes, adds Hiscock. The same for Canadian-sourced employment income. In many cases, the CRA will apply withholding taxes to Canadian-sourced income. The applicable percentage depends on the tax treaty (or lack thereof) in the country where you reside. “That money is taxable in Canada, but as a non-resident, it’s withheld at a specific rate. If you’re in Canada, your overall income determines your tax rate using our graduated tax system,” says Hiscock. “Non-residents are subject to withholding tax rates of up to 25% of income and/or withdrawal amounts, depending on the existence and wording of tax treaties.” In some cases, non-residents may complete a tax return for income in Canada to get some of the withholding tax back. “For example: If you own a rental property, the payer must withhold 25% and remit to revenue Canada,” says Hiscock. “A non-resident can choose to file a Canadian tax return for the rental income and deduct expenses, and may receive a refund if the 25% withheld was too high.” Also read Earning, saving and spending in Canada: A guide for new immigrants read now Since most people probably don’t consider reciprocal tax treaty relationships when they’re choosing somewhere to live, consult a financial pro to guide you. On the Government of Canada’s website, you can plug in the country you’re headed to, along with the Canadian income you expect to earn to calculate exactly what the withholding tax rate will be.  For example, if you’re moving to Portugal and will be receiving dividend income, the withholding tax rate is 15%. Collecting OAS in Denmark? You’ll be charged a withholding tax rate of 25%. Hiscock says people often think their exposure to tax is much greater than it actually is.  “People think they have to pay tax on every dollar they have in their non-registered investments, but it’s only on the gains,” she says. What costs can I expect as an expat?  In addition to the tax implications you’ll face, there are other costs associated with relocating abroad, like shipping your personal items and travel to and from your new country if you plan on visiting family. Also, banks tend to charge high exchange rates, so educate yourself about other currency transfer options, advises Hiscock.  For transfers, “big firms like Wise or OFX offer more favourable rates, and if you’re getting CPP or OAS, you can have those put into foreign bank accounts as well,” she says. And don’t forget: Canadian healthcare coverage eventually expires for expats. According to the CRA, your provincial health plan might cover some of your medical expenses outside the country should you get injured or sick, but you’ll have to pay those fees up front. And after six to eight months, your coverage becomes invalid.  “I’m always talking to people about health insurance, disability insurance and life insurance. In Canada, disability insurance is often a part of your employment package but that’s not the case for many people working overseas, so build those into your budget,” suggests Hiscock. “Find a broker that can assist with expat insurance.” Set up an emergency fund to cover three to six months of expenses. This is advisable for everybody, including residents of Canada, but even more so for expats, who face higher risks. “And if you don’t have a job, then set aside a significant emergency fund, depending upon your situation,” suggests Hiscock.  Talk to other expats The more information and lessons learned you collect from other expats, the better off you’ll be, says Judith Asher, a Montreal-born executive and leadership coach who moved to Italy 20 years ago with her Danish-born husband. The language barrier and not understanding how Italy’s taxation system worked when setting up her own consulting company proved challenging.   “When I first moved to Italy, there was much less information and advice available online from other expats about sorting out financial issues—Italy is notorious for its bureaucratic and often-changing financial rules,” she recalls.  “Until my Italian language abilities improved, I was unable to understand official government websites on my own and had to rely on others to explain the rules to me, which left me feeling frustrated and disempowered.”  Asher also wrongly assumed that when speaking with local accountants, she would be given options and financial advice that was in her best interest.  “I wish I’d known to ask probing questions like: ‘What else might I do to lower my tax burden?’, ‘What other deductions could I claim that we have not spoken about?’, ‘How might opening a company be more/less beneficial than being a freelance professional in terms of taxation and bureaucratic burden?’, ‘After I make these payments, what other payments will need to be made and when?’ and ‘What kind of documentation do I need to keep in order to claim deductions?’,” she says. Asher suggests expats ensure they understand their residency status and tax obligations by getting professional advice in advance from an accountant or lawyer in Canada with an expertise in the country you want to move to.  “Before seeking advice from local financial advisors, arm yourself with as much knowledge as possible including specific questions to ask—you’ll get more bang for your buck and avoid any nasty surprises, like dual taxation,” she says.  Asher also advises expats to investigate new tax-beneficial immigration programs.  “For example, Italy recently set up a visa program called Digital Nomad to attract professionals who can work remotely. It provides great tax benefits and would allow someone to try out living in Italy,” she explains. Expect complications Daniel Ferreira, an engineer from Montreal, moved to Copenhagen in 2019 to work on the city’s metro extension project. Because his parents are from Portugal, he has both a Canadian and a Portuguese passport, which he says made things easier. “The system in Copenhagen is pretty efficient. I didn’t have to pay to get my resident card—which is also my healthcare card—which was nice,” he recalls. However, Ferreira discovered that acquiring a Central Person Register number—a civil registration number assigned to residents like a social security number in Canada—can be tricky. You must have proof of residence for more than three consecutive months, and have a job. “It’s a double-edged sword: You need a work contract to get a CPR number, and you can’t get a work contract without a CPR number, so a lot of people just ask for the CPR number to get a work contract,” he says.  When Ferreira’s contract ended seven months later, he returned to Canada. In 2022, he went back to Copenhagen—this time without a job waiting for him. “I had a network here, and figured it’d be easy enough to get a job in engineering, but that didn’t happen,” he recalls.  As money ran low, Ferreira picked up work as a waiter to pay his bills. Before long, he fell in love with the chef and the couple opened their own restaurant, Yankees and Canucks, at an outdoor food market last spring. “My biggest expat tip: Make sure you have a job lined up first. Don’t do what I did the first time—or the second,” he laughs. Also read Best low interest credit cards in Canada compare now Keep your taxes in good standing Thinking of winging it by becoming a digital nomad and not filing a Canadian tax return? Think again, warns Hiscock. Not filing in these kinds of situations may result in penalties, including legal action. Some have thought, “I live on a boat, so I don’t have to be a resident anywhere.” Well, Canada doesn’t allow people to be a resident of nowhere, Hiscock says. “If you’re living on a boat, you would likely remain a resident of Canada unless you had closer ties with another country.” Avoiding taxes can affect your ability to get government benefits in the future. And it can create problems if you’re moving from country to country. The Canadian government provides lots of information to educate and help prepare you for the big move, and CRA’s step-by-step tax guide can help you plan the big move. Check your provincial or territorial website, too.  Becoming an expat is a great adventure that can be made much simpler by working with a tax professional or financial planner, adds Hiscock.  “Ensure you’re severing your ties properly, setting yourself up, and reporting your tax in your new country correctly,” she explains. “Sometimes, more than one expert is needed to get everything done. But it’s money well spent.” Read more about taxes: Tax due dates, credits and more: Your 2024 income tax return guide Moving? Don’t miss these tax deductions on your moving expenses “I have receipts”: Why you need to keep Canada income tax documents How are bonuses taxed in Canada? The post Canadian expat tax guide: “If I work abroad, where do I pay taxes?”—and other questions answered appeared first on MoneySense.

If you’re approaching or planning for retirement, you may have questions about Old Age Security (OAS) benefits, like: Do I need to apply for OAS? How much will I receive in OAS? When do OAS payments go out? We cover these questions and more below. But first, here’s a quick overview of how OAS works. About Old Age Security (OAS) Old Age Security benefits are monthly payments made by the federal government to supplement the income of eligible Canadians age 65 and older. Along with the Canada Pension Plan (CPP) and personal savings, OAS provides financial support for older Canadians. CPP and OAS payments are issued on the same dates. OAS payment dates for 2025 January 29, 2025 February 26, 2025 March 27, 2025 April 28, 2025 May 28, 2025 June 26, 2025 July 29, 2025 August 27, 2025 September 25, 2025 October 29, 2025 November 26, 2025 December 22, 2025 Where does OAS money come from? The money that funds the OAS comes from the federal government. Individual citizens do not pay into the fund directly. Who qualifies to receive OAS?  OAS eligibility depends on how long you have lived in Canada, your age and your citizenship. To be eligible for OAS, you must:  be at least 65 years old; and be a Canadian citizen or legal resident To answer the question of how long you’ve lived in Canada, it depends on where you live now. If you currently live in Canada, you must have lived in Canada for at least 10 years since you were 18 years old. If you live outside of Canada, you must have lived in Canada for at least 20 years since you were 18 years old.  Your employment history doesn’t affect your eligibility. You can even receive OAS if you are still working or have never worked before.  Enrolment for OAS is generally automatic, and you can expect to receive a letter in the month after you turn 64. If you don’t get confirmation of your enrolment, you may have to submit an application to Service Canada. You can do this online or by filling out a paper form.   Note that there are some circumstances when you may be entitled to other benefits, such as if you are widowed, or your spouse or common-law partner is eligible for the Guaranteed Income Supplement (GIS). (More info on the GIS below.) You can learn more about the OAS program and your eligibility by reading the government’s Old Age Security program toolkit. Featured RRSP Accounts featured EQ Bank Build your retirement savings with 2.00% interest, tax-deferred contributions and zero fees. go to site featured Registered GIC rate Earn a guaranteed 3.35% in your RRSP when you lock in for 1 year. go to site Best RRSP rates See our ranking of the best RRSP accounts and rates available in Canada. read now Why trust us MoneySense is an award-winning magazine, helping Canadians navigate money matters since 1999. Our editorial team of trained journalists works closely with leading personal finance experts in Canada. To help you find the best financial products, we compare the offerings from over 12 major institutions, including banks, credit unions and card issuers. Learn more about our advertising and trusted partners. How much can I expect to receive in OAS benefits?  Good news! The Old Age Security program is indexed to inflation, meaning that the government reviews the program quarterly (in January, April, July and October) and makes increases based on the Consumer Price Index (CPI). (Should the cost of living decrease, your benefits will stay the same.) However, these frequent adjustments make it difficult to predict the exact amount.  These are the maximum amounts anyone can receive from January to March 2025 based on age and income threshold: AgeMaximum monthly payment amountTo receive the OAS, your annual net world income in 2023 must be65 to 74$727.67Less than $142,60975 and over$800.44Less than $148,179Source: Government of Canada The amount you, personally, will receive in OAS benefits depends on three main factors: 1. The number of years you’ve lived in Canada since you were 18 years old If you’ve lived in Canada for at least 40 years since you turned 18, you’ll likely be eligible for the maximum pension payout amount. The CRA also notes there are some situations where you might qualify for the full OAS pension without having 40 years of residence—consider calling Service Canada to inquire (1-800-277-9914). If you don’t qualify for the full OAS pension, you might be eligible for partial OAS, says the CRA: “If you live in Canada when you apply, you can receive a partial OAS pension if you have lived in Canada for at least 10 years after the age of 18. If you live outside of Canada when you apply, you can receive a partial OAS pension if you have lived in Canada for at least 20 years after the age of 18.” 2. Your age when you begin receiving your OAS pension You can start receiving OAS at age 65. However, you can choose to delay your start date up to 60 months (which is five years) in return for a monthly 0.6% increase in your eventual pension payment. Using the September 2024 maximum monthly payout amount of $718.33 as an example, this is how delaying your start date could affect your pension. AgePercentage increaseHow much you could get for your OAS pension (July to September 2024)65n/a$718.336612 months x 0.6% = 7.2%$770.056724 months x 0.6% = 14.4%$821.776836 months x 0.6% = 21.6%$873.496948 months x 0.6% = 28.8%$925.217060 months x 0.6% = 36%$976.93Source: Government of Canada  3. Your current income  Over a certain net annual income level, you may not be eligible for OAS, and you may have to repay some or all of your OAS benefits through the pension recovery tax (OAS clawback). Keep reading for more details.  The federal government recently introduced an online tool for estimating OAS, the Old Age Security Benefits Estimator. Should I wait to start collecting my OAS?  You might be wondering whether you should delay your OAS start date after your 65th birthday. The answer will depend on your life and health circumstances, your retirement plans, whether you intend to continue working and, if so, what your income will be. A financial advisor can help you decide what’s best for you. The federal government notes, “After age 70, there is no advantage in delaying your first payment. In fact, you risk losing benefits. If you are over the age of 70 and are not receiving an Old Age Security pension, apply now.” Tools Find a qualified financial advisor near you Search our directory of credentialled advisors providing financial and investing services across Canada. use tool Are OAS benefits taxable?  Yes, OAS benefits are taxable as income. If you want to have your taxes deducted automatically each month, you can sign into your My Service Canada Account or complete the “Request for Voluntary Federal Income Tax Deductions – CPP/OAS” form (ISP-3520OAS). Otherwise,  you may have to pay your income tax quarterly.  Can my OAS be “clawed back”? If you’re a high-income Canadian over the age of 65, you may have to repay some or all of your OAS pension under the pension recovery tax. Whether you will have to repay, and how much, depends on your “net world income” in a given year and the minimum recovery tax threshold for that year. Each year also has a maximum recovery tax threshold—at that point, the entire OAS amount will be clawed back. Let’s look at how income affects OAS, plus strategies on how to reduce or avoid OAS clawbacks. What types of income are included in net world income? (Tap to open.) The CRA says net world income means income from all Canadian and foreign sources, including: Employment Business Pensions Social security Capital gains Rental property Interest Dividends How to calculate OAS clawbacks If your income is above a certain amount in a given year, you’ll have to repay some or all of your OAS. The recovery threshold changes each year, but the calculation remains the same: You pay back 15% of the difference between your income and the threshold amount for the year.  For example, for income year 2024, the minimum income recovery threshold amount is $90,997. If your total taxable income in 2024 was $120,000, then your repayment would be 15% of $29,003 (the difference between $120,000 and $90,997). That comes out to $4,350.45. OAS clawbacks are paid off in 12 monthly payments, starting in July of the following tax year (in this case, 2025) and ending the next June (2026, in this example). This July-through-June period is called the “recovery tax period.” Continuing our example: $4,350.45 divided by 12 is $362.54. That’s how much you would repay each month from July 2024 to June 2025. For income year 2025, the minimum income recovery threshold will be $93,454. For taxpayers aged 65 to 74, the maximum income recovery threshold (above which the full amount of OAS will be clawed back) is $151,668, and for those aged 75 and older, it is $157,490. Learn more about OAS recovery tax thresholds. How can I avoid OAS clawbacks? With some planning, it may be possible to reduce or avoid OAS clawbacks. One strategy is splitting pension income with a spouse who has a lower marginal tax rate. Another strategy is to base withdrawals from your registered retirement income fund (RRIF) on the younger spouse’s age—your minimum withdrawals may be lower. Keep in mind that different kinds of investment income are taxed differently, too. (Learn more about how passive income is taxed.) Consider speaking to a financial advisor or tax planner about these and other strategies.  What is the Guaranteed Income Supplement (GIS)? The Guaranteed Income Supplement (GIS) is a part of the OAS program that provides an additional, non-taxable monthly payment to Canadian residents who receive the OAS and whose previous-year income is below a certain threshold. Like OAS, the GIS is indexed to inflation. The income threshold changes annually. For example, from January to March in 2025, the threshold is $22,056 for a single person. If your 2024 income was less than that, you may qualify for the GIS. If you do, your maximum monthly OAS payment amount is up to $1,086.88. For couples, the maximum income thresholds for combined annual income in 2024 are: $29,136 if your spouse/common-law partner receives the full OAS pension; your maximum monthly payment is up to $654.23 $52,848 if your spouse/common-law partner does not receive OAS; your maximum monthly payment is up to $654.23 $40,800 if your spouse/common-law partner receives the Allowance benefit (a non-taxable payment for Canadians aged 60 to 64 whose partner is eligible for the GIS and your combined income is below the threshold for the Allowance); your maximum monthly payment is up to $1,086.88 If you don’t receive a letter from the government about the GIS, you can submit an application through a My Service Canada Account or by filling out a paper form and submitting it to Service Canada. You can apply for OAS and the GIS at the same time. Learn more about applying for the GIS. Learn more about the OAS program What to expect when receiving OAS at 65How to manage your account when you’re notified of OAS benefits. Should you collect CPP and OAS while working in your 60s?If you’re in your 60s and plan to remain in the workforce, here’s what you need to know about applying for your government pensions. Delaying CPP and OAS to age 70: Is it worth the wait?The longer you wait to use CPP and OAS, the more you could earn monthly. But with the recent boosts, is it more tempting to use these benefits? OAS entitlement and deferral rules for immigrants to CanadaIf you move to Canada in middle age, you won’t be entitled to the maximum Old Age Security pension. Find out the impact of OAS deferral in this case. Should you apply for OAS even if you have a high income?If you are a high-income senior whose Old Age Security would be fully clawed back, find out if you should still apply. Planning for retirement with little or no savings to draw onFinancial advice often caters to wealthier Canadians. What can retirement look like for those without healthy RRSPs or other savings? OAS clawbacks When to watch out for OAS clawbacksWorking in retirement? Beware clawbacks. Find out how to avoid clawbacks on your OAS pension. How to avoid OAS clawbacks when you’ve had a temporary increase in incomeWhat to do if a one-time bump in income triggers an Old Age Security benefit clawback. “Should I sell off some investments to avoid OAS clawbacks?”Cam is already feeling heavily taxed in retirement and wonders if he should get rid of his dividend-paying investments to avoid losing Old Age Security benefits. OAS allowance for a surviving spouse Survivor benefits: A guide to CPP, OAS, GIS and morePension rules for widows and widowers, explained. CPP and OAS after the death of a spouseHow to manage split pensions after the death of a spouse. Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now More about retirement: Planning for retirement with little or no savings to draw on 40 and no pension: What do you do? Single, no pension? Here’s how to plan for retirement in Canada What happens when you can’t manage your investments anymore? Can you help your kids financially without compromising your retirement? Can you delay a RRIF withdrawal? RRSP to RRIF, and LIRA to LIF: How it all gets done The post OAS payment dates in 2025, and more to know about Old Age Security appeared first on MoneySense.

In Canada, no retirement plan is complete without considering the CPP. Whether you’re approaching retirement or still several years away from it, the Canada Pension Plan will likely play a role in your retirement income. How big a role depends on several factors. You may have other questions, too. When to apply for CPP? When do the payments go out? And, of course, are CPP payments taxable? We cover this and more below. But first, here’s a quick overview of how the CPP works. About the Canada Pension Plan (CPP) The Canada Pension Plan is a retirement pension that offers replacement income once a person retires from working life. The CPP is a social insurance plan, and it’s one “pillar” of the retirement income system for Canadians—the other three are Old Age Security (OAS), the Guaranteed Income Supplement (GIS) and personal savings. The CPP is funded by contributions from workers, employers and self-employed individuals. It’s not paid for by the government, despite what many Canadians may think. A federally administered program, the CPP is mandatory, meaning that all Canadian workers and employers must contribute. The plan covers all of Canada except for Quebec, which has the Quebec Pension Plan (QPP) for residents of that province. Below are the CPP payment dates in 2025. CPP payment dates for 2025 January 29, 2025 February 26, 2025 March 27, 2025 April 28, 2025 May 28, 2025 June 26, 2025 July 29, 2025 August 27, 2025 September 25, 2025 October 29, 2025 November 26, 2025 December 22, 2025 Where does the CPP money come from? Unlike OAS and the GIS, the CPP is funded by employers and employees, and by self-employed people. These contributions, which show up as deductions on a paycheque, are aggregated and invested. For self-employed people, the CPP owed on your net business income is added to your tax bill. The principal plus any revenue earned goes back into the program. In January 2024, CPP contributions were raised as part of a seven-year government initiative, started in 2019, to increase retirement income. Read more about the CPP enhancement to see how much more you will pay as an employee or a freelancer. Who manages the CPP’s investment portfolio? The pension plan’s investments are managed by CPP Investments, a Crown corporation operating at arm’s length from the government. Every three years, the Office of the Chief Actuary of Canada evaluates the sustainability of the plan; the next review will be in 2025. “The CPP is projected to be financially sustainable for at least the next 75 years,” CPP Investments states on its website. Am I eligible for CPP? If you’re at least 60 years old and have made at least one contribution to the CPP, you are eligible to receive CPP payments. You may also be eligible if you’ve received CPP credits from a former partner or spouse who paid into the plan. CPP benefits are available to Canadian citizens, permanent residents, legal residents or landed immigrants. Should I apply for CPP or QPP? If you contributed to both the CPP and/or the QPP in Quebec during your working years, your residency at the time of your application determines which plan you’re eligible for—if you’re a Quebec resident, you apply for your pension from the QPP. Otherwise, you apply to the CPP. When you can start receiving your CPP You’re eligible to start receiving your pension anytime between the ages of 60 and 70 years old, but the younger you are when you begin receiving CPP, the smaller your monthly payouts will be. Many Canadians choose to begin receiving payouts at age 65. How long will I receive CPP benefits for? You will receive monthly CPP payments for the rest of your life. In the event of disability or death, CPP also provides income replacement to contributors and their families (one-time death benefit and monthly survivor’s pension and benefits for dependent children under 25). How much will my monthly CPP payments be? Your monthly CPP retirement pension benefit amount largely depends on three main factors:  your age when you begin receiving benefits how long, and for much, you contributed to the CPP your average annual earnings throughout your working life Generally speaking, the more money you’ve contributed and the longer you wait to begin receiving your pension, the higher your payments will be. That said, many people opt to take their pensions earlier than 70 years of age. In 2025, your maximum monthly CPP amount if you start your pension at 65 is $1,433. The average amount paid each month for a new retirement pension at age 65 in October 2024 was $808.14. You may be eligible for more CPP benefits if you have a disability or if you are the surviving spouse of a deceased CPP contributor. Learn more from the Government of Canada. You can calculate an estimate of your contributions in your My Service Canada Account. How to apply for your CPP benefits You can apply for your CPP benefits online through your My Service Canada Account, or on paper by downloading the application. Note that it can take up to 120 days (four months) to receive a determination of your benefits. CPP payments will be deposited to your bank account, if you opt for direct deposit, or you’ll receive cheques in the mail. Cheques are mailed out in the last three business days of each month. Are CPP payments taxable? Yes, as CPP is a taxable benefit. You can request that the Canada Revenue Agency (CRA) deduct federal income tax from each payment, via your My Service Canada Account or by downloading and filling out a PDF request form. If you don’t, you may have to pay income tax quarterly. (Learn more about CPP and taxes.) Featured RRSP Accounts featured EQ Bank Build your retirement savings with 2.00% interest, tax-deferred contributions and zero fees. go to site featured Registered GIC rate Earn a guaranteed 3.35% in your RRSP when you lock in for 1 year. go to site Best RRSP rates See our ranking of the best RRSP accounts and rates available in Canada. read now Why trust us MoneySense is an award-winning magazine, helping Canadians navigate money matters since 1999. Our editorial team of trained journalists works closely with leading personal finance experts in Canada. To help you find the best financial products, we compare the offerings from over 12 major institutions, including banks, credit unions and card issuers. Learn more about our advertising and trusted partners. Learn more about the Canada Pension Plan Here’s a collection of links to articles to get you more info on the CPP. The CPP enhancement What is the CPP enhancement?Contributions to the Canada Pension Plan went up in 2024. Here’s why and how much more you’ll pay as an employee or a freelancer. Make the most of your CPP benefits Why the 17% drop-out rule is key to your CPP entitlementHow zero income years affect the payments you’ll receive. How to double your CPP incomeNew analysis from the National Institute on Ageing makes a strong case for delaying Canada Pension Plan payments to age 70. Does everyone else agree? Should you collect CPP and OAS while working in your 60s?If you’re in your 60s and plan to remain in the workforce, here’s what you need to know about applying for your government pensions. When to start collecting your CPP benefits Delaying CPP and OAS to age 70: Is it worth the wait?The longer you wait to use CPP and OAS, the more you could earn monthly. But with the recent boosts, is it more tempting to use these benefits? “Should I delay my CPP if I’m not contributing to it?”You can still benefit from deferring Canada Pension Plan payments with less than maximum contributions. How the CPP interacts with other plans and affects your taxes Can Canadian seniors collect government benefits while still working?Find out about how semi-retirement affects taxes and clawback implications of receiving CPP and OAS. How CPP payouts work when you already have a pensionHow RRSP withdrawals or other pension payments affect CPP benefits. CPP and disability: When should you retire and start your pension?When collecting disability, retiring early is an option. But find out how that can impact disability income and retirement plans. How does CPP credit splitting work if I’m divorced?A Certified Financial Planner helps a MoneySense reader understand how pension splitting between divorced spouses works. Do non-residents pay tax on CPP? What if you live in the U.S.?Withholding tax is generally the only Canadian tax a non-resident pays for their CPP pension, and the tax burden is even smaller for non-residents living in the U.S. Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now More about retirement: Planning for retirement with little or no savings to draw on What happens when you can’t manage your investments anymore? Can you help your kids financially without compromising your retirement? Single, no pension? Here’s how to plan for retirement in Canada Can you delay a RRIF withdrawal? RRSP to RRIF, and LIRA to LIF: How it all gets done The post CPP payment dates in 2025, and more to know about the Canada Pension Plan appeared first on MoneySense.

Oliver, Who Learned to Ask for What He Needs AGE: 16SIBLING STATUS: Only childINCOME SOURCE:Has a regular allowanceREGULAR INCOME: $150 a month from allowanceCURRENT SAVINGS:$500 in an online chequing account; an RESP for university (ifhe gets in); a stock simulator account with $5,000 in it—Olivermakes stock trades to practise, then his dad executes the tradesfor real in an online investment account that Oliver will haveaccess to when he’s 18 Back to Oliver. I asked Oliver if there was anything else he wanted to ask about finances. He looked at his dad. Then to me. “Is crypto a good investment?” “That’s a doozy of a question,” I said, smiling. John cleared his throat. “I suspect this is directed at me because, well, I don’t know if Oliver told you, but I have a sum of money put aside that I invest on his behalf. He gets to make the choices in a stock simulator account, and then I trade them in real time so that he gets to learn about investing, dividends, capital gains, et cetera.” “And cryptocurrency,” I added with a grin. John’s eyes shot to Oliver and then back to me. “Yes. I also bought some cryptocurrency, and that didn’t pan out as well as we’d hoped.” “As well as you’d hoped,” Oliver corrected. “Son, you were there and just as curious. I only traded that with your permission. I—” “Dad, it’s fine. I’m just razzing you.” Oliver grinned. John did not look like he appreciated the razzing. He adjusted himself in his seat, his face a little flushed. “Oliver,” I said, “do you actually want to know my opinions about crypto, or are you just putting your dad on the spot?” Oliver put a hand on his heart and feigned shock. “I’m offended by that, Shannon. Of course I want to know if my future is blown because of a bad cryptocurrency purchase.” “That’s enough,” John said in a warning tone. “I agree,” I said. Oliver held up his hands, like a peace offering. As if to say, “Okay, okay, I’ll stop.” “John, can I ask,” I started, “how much of the $5,000 you invest on Oliver’s behalf was in the cryptocurrency?” “We bought $500 near the end of 2021.” He looked at me. Waiting for my reaction. Student money guide How to pay for school and have a life—a guide for students and parents Read now What makes an investment “good” or “safe”? “A lot of people bought crypto for the first time in 2021,” I said. “Some people have made lots of money, some people have lost lots of money.” “Yeah, well, we lost,” Oliver said. “What’s it worth now?” I asked. “About $350,” John said. “So, not a good investment,” Oliver chimed in. “Hold on,” I said. “Isn’t that, like, a 30% loss, though?” Oliver asked, annoyed. “It is, but it’s also only been a year. It’s not really a good idea to judge if something is a”—I made air quotes with my hands—“‘good investment’ or a ‘bad investment’ after such a short time. I’d say the same thing if you purchased a blue-chip dividend stock that went down.” “Aren’t blue-chip stocks safe?” Oliver asked. I sat back and eyed him for a moment. “What does ‘safe’ mean for you here?” His eyes sort of widened. “Uh.” He shrugged. “Like, not going to go down?” I shook my head. “As soon as your money leaves high-interest savings accounts or Guaranteed Investment Certificates, it can go down. All investments have some type of volatility. If you want something that never goes down, you have to stick to things like high-interest savings accounts and GICs.” “But those have no opportunity for growth,” John added. “They just keep pace with inflation. The entire point of investing is to grow your money more than inflation.” Oliver looked to me to confirm or deny this tidbit from his dad. I nodded. “Absolutely. And with that potential growth comes risk. Risk with investing doesn’t mean risk like—oh, I don’t know—perhaps the risk of gambling.” Neither of them laughed. “Too soon?” I joked. “But I mean it. And I think we should discuss the difference. I would do this even if there were no such thing as sports betting.” “Yeah, right,” Oliver mumbled. Is investing like gambling? “Oliver,” I said earnestly, “I’m not taking a cheap shot. Truly, some people think investing is gambling. It’s not at all, and it’s important to understand the difference.” “Okay, fine,” he said curtly. I carried on. “Sometimes, when we talk about investing, we talk about this thing called the risk return trade-off. It’s an investment principle that basically says, the more risk you take, the more potential return you could get. The return is the money you make, or rather the money you could make.” “Like slot machines,” Oliver said. “If you play the penny slots, you don’t lose much money, but you’re not going to gain much money either. If you play the $5 slots, you could lose much more, but gain much more.” I grimaced a bit at the gambling reference, given the circumstances, but he had a point. “That’s a great point. But again, I am careful not to compare gambling to investing.” “Gambling is irresponsible,” John piped in. “Investing is smart.” “Investing can also be irresponsible,” I said, and John flinched. “When not done correctly or for the right reasons. Think about people who jumped on the bandwagon with those meme stocks and lost thousands.” I turned to Oliver. “Even though the stocks themselves are not risky, jumping on a bandwagon based on a stock meme could be very similar to gambling.” “Well, of course,” John said. “If you’re talking about throwing your money at something trendy, yes.” “Plenty of people thought—and still think—crypto is trendy.” How much risk should you take with your investments? He was getting huffy. “I don’t think that a $500 purchase of crypto is the same as throwing your life savings at a meme stock.” “It’s not. It’s not the same at all. And that’s the exact difference. There are always going to be investment opportunities that are new or alternative investments, or maybe a stock that could be extremely volatile, which may give it an opportunity for big growth. A long shot. Just because something is volatile, or risky, doesn’t mean that it’s bad or irresponsible. An investment becomes irresponsible for two reasons.” I counted them off on my fingers. “First, when someone invests money they’ll need within the next one to two years.” I waited for them to nod along. “And second, when they invest in something that is potentially extremely volatile with an amount of money that they can’t actually afford to lose.” “Like life savings on a stock tip type thing,” Oliver said. “Exactly,” I said. “For you, putting $500 into crypto to see what happens and taking a long shot is not irresponsible because it’s a small portion of what you have. You don’t need the money in the next one to two years, so you have a long time horizon. Plus, it’s an amount of money that, even if it went to zero, you’d all still be financially okay.” “But if we YOLO’d the full $5,000, that would be irresponsible,” Oliver said. “Yes.” Noticing John looking confused, I added, “By YOLO, I know you mean if you put your entire savings into a single high-risk investment.” “People do that, you know.” Oliver said it almost like a challenge. I think he was testing to see if I knew about these types of online investing threads on social media. “They post their trades online. They trade, like, thousands and try to double it.” I said nothing. He shrugged. “Sometimes it works,” he said in a tone that was far too nonchalant for me. “And many times, it doesn’t.” I leaned in and was very serious. “Oliver, this is not a safe or smart way to grow your money. Anybody’s money,” I added in a warning tone. “YOLOing with your money is almost like gambling.” “Buy high, sell low,” he said with a giggle. “That’s where it leaves a lot of people,” I said solemnly. John chimed in. “What are you two talking about?” Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now Should you follow investment advice from social media? I looked to John. “Online investing threads on social media that glorify massive losses and taking huge risks. We all know that the point of investing is to buy low and sell high. There’s a thread online that makes a joke about the massive losses people end up with because many people buy when a stock is high, or it’s a risky long-shot, and they end up losing everything.” Oliver was quiet, but he had a smile. I was not impressed. “It’s not funny,” I said to him, so seriously that he stopped smiling. “I’ve seen this ruin people’s lives and marriages. Someone losing their life savings isn’t funny.” “No, I know that,” Oliver said defensively. “But, like, they made the trade.” He held his hands up, as if to say, “It’s their fault.” “Why would anyone do that?” John asked. “Throw money away like that?” “I can only speak to what I’ve seen. Most times, it comes from a desperate place. People feel like no matter how hard they work, they will never be able to get ahead, so they feel they have to take these massive risks with their money to ‘get lucky.’” “That’s quite upsetting,” John said. “It is,” I agreed. “It’s one thing to take some of the money that you can afford to lose, that could go to zero, and take a flyer. It’s quite another to publicly post your entire life savings going into one single stock on the off chance you get lucky. That’s why investing like that is akin to gambling. It can start a loss cycle where you bet bigger and bigger, trying to cover the last loss.” “I didn’t think about it like that,” Oliver mumbled sheepishly. “It just seemed funny online.” I let the silence sit for a moment. Awkward silence can be very effective. Don’t YOLO with your money Oliver spoke first. “So, what you’re saying is, my dad and I should combine our money and invest everything tomorrow into one longshot penny stock, yeah?” We all laughed and the tension was broken. “Very funny,” I said. “I know you’re joking,” John said to Oliver. “But I also need to know that you don’t think this ‘YOLOing the market’ is a good idea, right?” “No,” Oliver said. “Unless it was an amount of money that could safely go to zero.” I smiled. “Exactly. Money that you can afford to go to zero.” “Who can afford play money these days?” John asked incredulously. “In this economy?” “Not many people,” I said. “Which is why it’s scary when you see it.” “So, do we just keep on investing the way we are?” John asked. “I would start by looking at Oliver’s risk tolerance.” I turned to him. “I’d say your tolerance is very high. You are not afraid of volatility in exchange for potential high returns.” “That’s true,” Oliver agreed, proudly. “Plus, your time horizon is long for this $5,000. You don’t plan to spend it or use it for five years or more, right? Even past 18 years old?” “That’s right,” John said. I looked at Oliver to confirm. “Yeah?” He nodded. “So, the fact that you’re invested in blue-chip stocks and well diversified with exchange-traded funds, I’d say it’s a well-balanced, low-fee, diversified portfolio that suits your time horizon and risk tolerance.” I was smiling. Tools MoneySense’s ETF Screener Tool use tool “And that’s good,” Oliver said. “That’s great,” I said. “Good,” John said. I could tell he felt vindicated. “And if I want to invest in something high risk when I turn 18,” Oliver said, “I can just invest with an amount of money I’m okay with totally losing.” “Oliver, no,” John said. “That’s—” I cut him off gently by raising my hand. “It will be his money then, right?” John nodded. “So, Oliver, you can absolutely do that,” I said. “The key is not to ‘YOLO.’ Don’t throw in your life savings. Only play high risk with an amount that you can afford to fully lose.” Is it ever OK to lose money in the markets? “You think it’s okay for him to lose money?” John said, genuinely shocked. I leaned forward. “John, I know it’s not conventional thinking, but I believe it can be a great way for people to truly learn their risk tolerance. It’s one thing to sit here and say, ‘I have a high risk tolerance. I can handle ups and downs.’ It’s entirely another thing to watch your money go down. It’s hard. With a little bit of safe experimentation, we scratch that itch on the rebellious side of us, or the overly optimistic side that hopes for a big break, and we can learn who we really are when it comes to investment losses.” Oliver spoke up. “It’s a problem only if I start using money that I can’t afford to lose.” “Exactly. Money for bills and spending money. Money for responsible short- and long-term savings. Those all come first. And if you actually have money left over after filling all those buckets, congrats! That’s no easy feat. Especially these days.” They both nodded, and we didn’t say anything else. It felt like we had said it all. John looked at the clock and stood up. “We’ve taken a lot of your time. Thank you so much for today.” We shook hands. “It was lovely to meet you.” “I’ll wait outside,” John said to Oliver, and he walked out the door. I turned to Oliver and released a big sigh. “I can’t wait to see how you make your first million.” “Well, it won’t be from YOLOing or sports betting,” he said with a smile. “Good,” I said. “Do you feel good about everything? The allowance? The plan? All of it?” He smiled and nodded. “The allowance will be a game changer.” “I think so too.” He got up and put his backpack on. “Thank you.” “No, Oliver, thank you.” “This would be an exciting chapter in your book,” he joked. “Oh, Oliver, this is going to be the entire book!” We laughed hard. “You stay in touch, okay? Call me for some financial planning when you’re grown-up.” “I will.” I was going to miss him. I was worried about him. I knew, deep down, he was going to be okay. He might take some time to find his footing and do things his way, but he was smart and resourceful, and those aren’t just good money skills, they are good life skills. Besides, he was young and time was on his side. Like it is for you! Excerpted from Making Bank: Money Skills for Real Life by Shannon Lee Simmons. (HarperCollins, 2025).Simmons is a Certified Financial Planner and life coach, a Chartered Investment Manager, bestselling author and founder of the award-winning New School of Finance Inc. She is also the author of Worry-Free Money, Living Debt-Free and No-Regret Decisions. Read her My MoneySense profile: Shannon Lee Simmons defines “emotional return on investment” and her take on personal debt. The post Is investing gambling?—and other real-life money lessons for teens appeared first on MoneySense.

Lululemon Athletica Inc. is expecting modest growth in its U.S. business this year, with consumers pleased with the clothing retailer’s fresh offerings but cautious about the economy. Chief executive Calvin McDonald told a quarterly conference call Thursday that the company has done some polling with Ipsos that suggests U.S. customers are spending less due to concerns about inflation and the economy. “This is manifesting itself into slower traffic across the industry in the U.S. in quarter one, which we are experiencing in our business as well,” he said.  “However, we see guests who visit us responding to the newness and innovations we’ve brought into our assortment… We are controlling what we can control and we expect to see modest growth in U.S. revenue for the full year of 2025.” Tariffs make U.S. consumers more cautious Chief financial officer Meghan Frank said that trend of consumer caution has not been apparent in other regions of the world where the retailer operates.  The Vancouver-based clothing retailer said it expects overall revenue growth to be in the 6% to 7% range during the first quarter of fiscal 2025. Frank said the impact of U.S. tariffs on its trading partners has been factored into the company’s 2025 guidance, particularly when it comes to imports from China and Mexico.  “We’ll continue to look across our cost structure as well as to pricing, should the environment change,” she said.  U.S. President Donald Trump has enacted tariffs on Chinese imports. He also levied tariffs against Mexico in early March, many of which which were put on pause for a month.  Lululemon Q4 earnings On Thursday after markets closed, Lululemon reported fourth-quarter net income of $748.4 million, up from $669.5 million in the same period a year earlier. (All figures in U.S. dollars.) The company says the profits amounted to $6.14 per diluted share, up from $5.29 per diluted share in the fourth quarter of 2023.  Net revenue was $3.61 billion for the quarter ended Feb. 2 compared to $3.21 billion a year earlier.  The reported earnings and revenue beat the fourth-quarter guidance Lululemon released in January. It previously said it expected diluted earnings per share to be between $5.81 and $5.85 and for revenues to be as high as $3.58 billion.  How Lululemon is striving to attract customers McDonald said the company is continuing to improve the brand’s “newness”—a key way to draw in customers by making products and styles appear fresh.  Ways to boost newness include new colours, prints, patterns and silhouettes, as well as partnerships with celebrities and other brands.  On the call, McDonald highlighted some new offerings this year, including the Glow Up workout gear line that he said offers a “smooth and sculpted fit,” as well as Day Drift casual trousers that have “superior comfort and versatility” and could become a new core franchise.  “Looking at quarter one, we have increased our level of newness on par with the past,” said McDonald. “We believe this increase, along with a robust pipeline of innovation, will enable us to meet the expectations of our guests.” For all of 2024, the company had net income of $1.81 billion, or $14.64 per diluted share, up from $1.55 billion, or $12.20 per diluted share.  Full-year revenues were $10.59 billion, up from $9.62 billion.  Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now Read more about stocks: How young investors can respond to stock market volatility Couche-Tard reports Q3 earnings, still pursuing deal with 7-Eleven operator Shopify’s new exchange, Google’s acquisition, Nvidia’s launches and OTPP’s performance The post Why Lululemon is seeing more ‘modest’ growth in the U.S. appeared first on MoneySense.

Canadians have many options for saving and growing their money. They can use registered savings and investment accounts, which offer powerful tax advantages. If you’re saving up a retirement nest egg, you likely have a registered retirement savings plan (RRSP) and a tax-free savings account (TFSA). Here’s a quick refresher on RRSPs and TFSAs, including their contribution limits: Comparison pointsRRSPTFSAPurposeRetirement savingsAny savings goal, short-term or long-termAge requirementAny age up to 7118 and olderEarned income requirementYes, you must earn income to create contribution roomNoTax deduction for contributionsYes, and tax deductions can be carried forward for a future tax returnNoTax on growth (interest, capital gains, dividends)Tax-deferred, until funds are withdrawn (during retirement, when income is likely lower)Tax-freeContribution roomWhichever is lower: 18% of your previous year’s earned income or the government’s annual RRSP contribution limit (for the 2024 tax year, it is $31,560, and 2025, it will be $32,490), plus any unused contribution room from previous yearsAccumulates from age 18, with different amounts announced each year (for 2025, the limit is $7,000); if you were born in or before 2009 (the year the TFSA launched), your cumulative limit as of Jan. 1, 2025, is $102,000What it can holdCash and qualifying investments: stocks, bonds, mutual funds, exchange-traded funds, guaranteed investment certificates (GICs) and moreCash and qualifying investments: stocks, bonds, mutual funds, exchange-traded funds, guaranteed investment certificates (GICs) and more What if you’ve maxed out your RRSP and TFSA? If you’ve been making steady contributions to your RRSP and TFSA over time, you may have run out of room—particularly for the TFSA, with its modest annual limits. If you’re looking for an alternative, consider a high-interest savings account (HISA). HISAs are as easy to use as regular bank accounts: you can access your savings anytime, transfer money and set up automatic deposits. They don’t lock in your money for years or even months, as some savings products would (we’re looking at you, GICs and bonds). And, very important for dedicated savers, HISAs have no contribution limits. Simplii Financial’s High Interest Savings Account currently has a generous welcome offer for new clients: you can open a HISA between April 1 and June 30, 2025, to earn 3.7% for seven months on eligible deposits up to $500,000. Visit Simplii Financial’s website for current rates. sponsoredSimplii Financial High Interest Savings AccountGO TO SITE Simplii’s HISA has no transaction fees or monthly fees, and no required minimum balance. Welcome offer: Earn 3.70% interest on eligible deposits for the first 7 months. (Limits apply. Offer ends June 30, 2025.)Interest rate: 0.30% to 1.50% (depending on your balance) GO TO SITE Simplii’s HISA is free of things you don’t want—including monthly fees, transaction fees and minimum balances—so there are no extra costs to detract from your savings. If you haven’t run out of RRSP and TFSA contribution room, Simplii also has competitive interest rates on those accounts for clients who open one before March 31, 2025. Visit Simplii.com for details. Customers must join Simplii first before opening a TFSA or RRSP account. Don’t let bonus interest pass you by You could leave your surplus cash in your regular savings account, but have you checked its interest rate lately? You may be surprised what you’re missing out on. A HISA can help you to keep growing your savings when other options have been exhausted or are too restrictive for your financial goals. Whether you’re saving for a family vacation, home renovations or retirement spending (or maybe all three), bonus interest can get you there faster—especially when you consider the power of compounding. Visit Simplii Financial’s website to open your HISA and receive the bonus 3.9% interest for the next five months—consider it a bonus for your stellar saving habits. This article is sponsored. This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers. Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now Read more about savings: ● Your home sold—now what?● HISAs vs. bonds and GICs: Where should Canadians hold their cash?● Does buying GICs still make sense after the recent rate cuts?● 3 financial goals to kick-start the new year The post Maxed out your TFSA and RRSP? Here’s where to put cash appeared first on MoneySense.

If you’ve sold your home or are planning to soon, you may have a large amount of cash that needs a temporary parking spot while you prepare for your next move. A regular savings account pays very little interest—so unless you need the money right away, it makes sense to seek higher returns. Several options are available—but what is best for your situation? Short-term investments such as bonds and guaranteed investment certificates (GICs) pay interest but might not give you the flexibility you need. Stocks and exchange-traded funds (ETFs) offer potentially higher yields but also come with higher risk. A simpler and more accessible solution is to use a high-interest savings account (HISA), like Simplii Financial’s HISA. Simplii is a Canadian digital bank with over two million customers. It offers 24/7 access to online and mobile banking with no monthly fees, as well as access to one of the largest national ATM networks through CIBC. With Simplii’s HISA, you can earn high interest, and you don’t have to lock in your money for a set period of time, as you would with a bond or GIC. Plus, you already know how to use it—Simplii’s HISA works just like a regular bank account. sponsoredSimplii Financial High Interest Savings AccountGO TO SITE Simplii’s HISA has no transaction fees or monthly fees, and no required minimum balance. Welcome offer: Earn 3.70% interest on eligible deposits for the first 7 months. (Limits apply. Offer ends June 30, 2025.)Interest rate: 0.30% to 1.50% (depending on your balance) GO TO SITE Are you planning to sell your home?  The real estate market has been slow, despite recent reductions in the Bank of Canada benchmark interest rate and new buyer-friendly changes to mortgage rules. But economists widely expect more cuts from the central bank before the end of the year. Considering all these factors, we may see a stronger real estate market in the months ahead, enticing more buyers and sellers to jump back in. If you’ve been thinking about selling your property, now’s a good time to get ready, and to make a plan for what to do with the money while you look for your next property or make other plans. Let’s look at what happens immediately after you sell your home. How do home sellers get paid? Depending on the closing date, the proceeds from the sale of your home may take a while to reach your bank account. Your lawyer will take on the tasks required to close your home sale, including discharging the mortgage and title, reviewing property tax information, performing closing adjustments and preparing documentation. However, when it comes to receiving money from the buyer, it will go through several hands before it gets to your bank. Your lawyer will first discharge (repay) your mortgage, if you have one, and cover any other charges, such as a prepayment penalty or other fees. Next, your lawyer will deduct their legal fees. Then, the realtors on both the buy and sell sides receive their commissions, and what’s left is yours. Your lawyer will give you a full accounting of how they distributed the monies and what your net proceeds are. You will receive a certified cheque, bank draft or wire transfer for the proceeds on or after closing day. Check with your lawyer for the exact timing. If you aren’t immediately closing on a new home, you can put the money into a high-interest savings account, where it will grow while you think about your next steps. What are high-interest savings accounts? High-interest savings accounts provide higher interest rates than traditional savings accounts. Unlike with GICs, HISAs allow you to access your funds anytime and still earn a great rate. Look for a HISA that has low or no fees. Simplii Financial’s HISA has no monthly fees or transaction fees, and there’s no minimum balance required. The larger your account balance, the more interest you could earn. For a limited time, you can open a Simplii Financial HISA between April 1 and June 30, 2025, to earn 3.7% for seven months on eligible deposits up to $500,000. Visit Simplii Financial’s website for current rates. Interest is calculated by multiplying the daily interest rate (based on the applicable annual rate) by the daily closing balance of your account and is paid into your account monthly. Rates are subject to change without notice. The HISA advantage If you’re selling your property and are figuring out what to do with the proceeds while you search for your next home, a HISA is a great option to store your cash. Parking the proceeds in a Simplii HISA can help you earn significant interest while keeping your funds safe and accessible—giving you the flexibility to withdraw your cash when the right opportunity appears. Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now This article is sponsored. This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers. More on savings: The one inflation tool you need for your finances Does buying GICs still make sense after the recent rate cuts? 3 financial goals to kick-start the new year Planning holiday spending and cash gifts? Here’s how to boost your budget How to plan for retirement when you have no pension The post Your home sold—now what? appeared first on MoneySense.

“Bonds are back,” you may have read on a financial news site or heard a financial advisor say recently. True enough, money is flowing into these fixed-income investments at the highest rate in years, and for good reasons. In fact, Canadian savers have an abundance of good choices right now for places to earn rates of interest that will keep their money growing ahead of inflation. So, where should you put your money: in bonds, guaranteed investment certificates (GICs) or a high-interest savings account (HISA)? You may be surprised at how similar these are for interest rates. But there’s more to the story. Is it time for Canadians to invest in bonds again?  The talk of bonds coming back only makes sense if you understand where they went. For most of the past decade, bonds have been a terrible investment as interest rates fell to historic lows, meaning they paid almost no interest. Then inflation took off as the global economy lurched out of the COVID-19 pandemic, and central banks were forced to raise interest rates—fast. A bond is a security that pays a set interest rate for a set time until it matures. When it does, the issuer (a government or a corporation) returns all the principal to the bond holder (you), plus interest. When interest rates go up, older bonds paying lower rates of interest fall in value—in 2022, the Canadian bond market aggregate fell more than 10%! So, bonds, especially those still a long way from maturity, can fluctuate in price. But it’s not all bad. They can also rise in value when interest rates fall. That’s been happening lately, hence the “bonds are back” narrative. If you put your money in a bond fund at the beginning of 2024, you will not only have earned interest but also a capital gain. In other words, you could sell your holdings today for more than you paid for them. Where should you put your money: Bonds, GICs or a HISA? The best place to invest depends on your financial needs, preferences and the purpose of your deposit. Let’s look at the pros and cons of each savings and investment vehicle: Good to knowProsConsBonds Buying individual bonds can be tricky, which is why most Canadians who want bonds typically invest in mutual funds or exchange-traded funds (ETFs) that hold them.You can sell fund units anytime; you can earn capital gains as well as interest when interest rates fall.The value of your holdings varies; they are not covered by deposit insurance; buying and selling may involve fees.GICsGICs are a contract with a bank or credit union. Unlike a bond, they aren’t tradeable.Your principal is guaranteed; GICs tend to pay the highest rates of interest of the three.GICs are illiquid (you generally have to hold them to maturity, unless you choose a lower-interest redeemable GIC); no capital gains potential.HISAsA HISA is simply a savings account that pays a higher-than-average interest rate.Principal is guaranteed; no fees to set up; ability to withdraw money at any time.Returns come from interest only. sponsoredSimplii Financial High Interest Savings AccountGO TO SITE Simplii’s HISA has no transaction fees or monthly fees, and no required minimum balance. Welcome offer: Earn 3.70% interest on eligible deposits for the first 7 months. (Limits apply. Offer ends June 30, 2025.)Interest rate: 0.30% to 1.50% (depending on your balance) GO TO SITE Save faster with a Simplii HISA Simplii Financial’s HISA is easy to use and has no transaction or monthly fees and no minimum required balance. It works like a regular bank account: you have 24/7 online access using Simplii’s website or mobile app, and through CIBC’s nationwide network of ATMs. Plus, right now, you can open a HISA between April 1 and June 30, 2025, to earn 3.7% for seven months on eligible deposits up to $500,000. See the Simplii Financial website for base rates. How does the interest work? It’s calculated by multiplying the daily interest rate (based on the applicable annual rate) by the daily closing balance of your account, and it’s paid into your account monthly. Rates are subject to change without notice. What works for you and your cash As you can see, there’s more to opting between investments and accounts than comparing interest rates. GICs might offer the highest rates (for now), but they are unsuitable for savers who might need to access their money earlier than they expected (for example, to place a down payment on a home). Bonds may look good now, but they can be risky if you need every penny of your savings returned. If simplicity, flexibility and paying no fees are your top priorities, then a HISA is an excellent option. This article is sponsored. This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers. Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now More about savings and banking: 3 financial goals to kick-start the new year Does buying GICs still make sense after the recent rate cuts? Planning holiday spending and cash gifts? Here’s how to boost your budget Your home sold—now what? Is your chequing account working hard enough? The post HISAs vs. bonds and GICs: Where should Canadians hold their cash? appeared first on MoneySense.

In March, the Bank of Canada (BoC) lowered its policy interest rate by another 25 basis points, from 3.00% to 2.75%. It was the central bank’s seventh consecutive cut. What does it mean for Canadians as borrowers and savers when interest rate cuts happen? On the positive side, it means we’re starting to get inflation under control, and lenders are beginning to offer lower rates on mortgages and other types of loans. On the downside, it means the interest rates you can earn on guaranteed investment certificates (GICs)—a popular short-term savings vehicle in Canada—have started to drop. Grow your savings with a high-interest savings account Because GIC rates are dropping, Canadians are looking for alternatives for their short-term cash savings. High-interest savings accounts (HISAs) are a good option to consider. Whether you’re setting aside money for home renovations, a big trip or a financial gift to help your child buy their first home, HISAs provide more flexibility and liquidity than GICs, meaning your cash isn’t locked in and you can access it when needed. HISAs pay competitive interest rates, too, so your money can grow while you save. sponsoredSimplii Financial High Interest Savings AccountGO TO SITE Simplii’s HISA has no transaction fees or monthly fees, and no required minimum balance. Welcome offer: Earn 3.70% interest on eligible deposits for the first 7 months. (Limits apply. Offer ends June 30, 2025.)Interest rate: 0.30% to 1.50% (depending on your balance) GO TO SITE Which is better: A GIC or a HISA? The answer will likely depend on your financial goals and your timeline for saving. If you’re setting aside cash for an emergency fund, for example, accessing it should be quick and easy. A HISA is a good option because it works like a regular bank account but pays more interest. On the other hand, if you have a large amount of cash because you’ve just downsized your home, and you don’t plan to spend or invest all of it soon, a GIC or a HISA may be suitable depending on your timeline and the current rates offered.  Also, if you’re nearing retirement or already in your post-work life, you don’t want to risk the nest egg you’ve saved up. At this stage of life, many Canadians shift their savings away from equities towards more conservative investments such as GICs. This especially made sense when GIC rates were high; today, a HISA may offer a similar rate of return, plus greater flexibility. Pros and cons of GICs and HISAs So, which is better for your savings goals: a GIC or a HISA? Let’s look at the pros and cons. GICsHISAsPros• Reasonable rates for one-year GICs still available• Can be held in a registered or non-registered account• Eligible for CDIC coverage• Greater flexibility• Funds are not locked in• Attractive promotional rates• Eligible for CDIC coverageCons• Usually requires locking in your funds for a set time• Rates are quickly declining• No longer paying 5% or more in interest• Non-registered account, so no tax advantage What is CDIC coverage? (Tap to open.) CDIC is short for the Canada Deposit Insurance Corporation, a non-profit crown corporation. It provides up to $100,000 in deposit insurance per depositor, per insured category, if your bank fails, as long as it’s a CDIC member financial institution. Learn more in the MoneySense Glossary Grow your savings with Simplii Financial’s HISA Simplii delivers a simple and easy way to bank for more than two million Canadians, with 24/7 access to online and mobile banking with no monthly fees, as well as access to one of the largest national ATM networks through CIBC. Simplii’s HISA offers many attractive features: It has no transaction fees or monthly fees, and no required minimum balance. You can set up automatic deposits to keep your savings growth on track. You can access your cash easily when you need it. And, of course, the HISA pays more interest than a regular savings account, plus it has a generous welcome offer: Open a HISA between April 1 and June 30, 2025, to earn 3.7% for seven months on eligible deposits up to $500,000. Visit Simplii Financial’s website for current rates. Interest is calculated by multiplying the daily interest rate (based on the applicable annual rate) by the daily closing balance of your account and is paid into your account monthly. Rates are subject to change without notice. Final thoughts on GICs and HISAs Canadians love their GICs, but there are times when HISAs may be a better option, especially if you need to access your savings at short notice or you’re not sure when you’ll need the money. HISAs offer greater flexibility and liquidity for your short-term savings and allow you to keep growing your money while you save. This article is sponsored. This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers. Newsletter Get free MoneySense financial tips, news & advice in your inbox. subscribe now More on savings: 3 financial goals to kick-start the new year Your home sold—now what? HISAs vs. bonds and GICs: Where should Canadians hold their cash? The one inflation tool you need for your finances Planning holiday spending and cash gifts? Here’s how to boost your budget The post Does buying GICs still make sense after the recent rate cuts? appeared first on MoneySense.