The Non-Registered Account
No contribution limits, complete liquidity, and favorable tax treatment on capital gains and dividends. The non-registered account is the perfect complement to your TFSA and RRSP accounts.
Speak to an advisorKey points
What is an unregistered account?
An unregistered account is an investment account that does not benefit from any specific tax advantages — unlike the TFSA or the family RRSPIn return, it has no contribution limit and offers total liquidity.
The unregistered account is often used by investors who have maximized their registered accounts and wish to continue growing their wealth, or by those who need flexible access to their funds.
Unlimited
No contribution limit — invest as much as you like
Optimized taxation
Capital gains and dividends benefit from favorable tax treatment
Total liquidity
Withdrawals at any time, without penalty or restriction
Advantages of an unregistered account
Absolute flexibility: There is no limit to your contributions. You can invest as much as you like, whenever you like — a freedom that registered accounts cannot offer.
Liquidity: Withdrawals can be made at any time without penalty. This makes it an ideal vehicle for short-term objectives or as a reserve fund.
Diversification: You can hold a wide range of investments: stocks, bonds, mutual fund, Segregated funds, GICsETFs and more.
Deductible capital losses: Unlike registered accounts, capital losses incurred in a non-registered account can be used to offset capital gains — from the current year, the previous 3 years, or carried forward indefinitely.
Taxation of unregistered accounts
Income generated in a non-registered account is taxable annually. However, the tax treatment varies depending on the type of income, which offers opportunities for optimization.
Capital gains
When you sell an investment at a profit, the gain is a capital gain. The first $250,000 of annual capital gains are included in 50% in your taxable income. Beyond this threshold, the inclusion rate increases to 66,67%This is the most tax-efficient type of income.
Dividends:
Dividends from Canadian companies benefit from the dividend gross-up and dividend credit mechanisms, which significantly reduce the effective tax liability. "Eligible" dividends (from large companies) offer a higher credit than "ordinary" dividends (from small companies).
Interest:
Interest income (from GICs(from bonds or savings accounts) are taxed at 100% as ordinary income — this is the least tax-efficient type of income.
Tax strategy
To maximize tax efficiency, place your interest-generating investments (GICs, bonds) in your registered accounts (TFSA, RRSPwhere they grow tax-free. Reserve your non-registered account for investments in stocks and equity funds that generate capital gains and dividends — types of income that are better treated tax-wise.
When should I opt for an unregistered account?
Maximized registered accounts: You have reached the contribution limits of your TFSA and your RRSP and wish to continue investing.
Short- or medium-term objectives: Whether it's buying a house, taking a trip, or building an emergency fund — a non-registered account provides the necessary liquidity.
Supplementary retirement income: It can complement your RRIF withdrawals and pension benefits for a balanced and tax-optimized income strategy.
Company or management company: Corporate non-registered accounts are often used by incorporated professionals and entrepreneurs to invest business surpluses.
Tips
It is essential to document your contributions, withdrawals, and the adjusted cost base (ACB) of your investments in a non-registered account. This information is necessary to correctly calculate your capital gains or losses when filing your income tax return.
Comparison with registered accounts
The unregistered account is not a substitute for TFSA or the family RRSP — it supplements them. The optimal strategy is generally to maximize your registered accounts first, then use the unregistered account for additional funds.
The TFSA offers tax-free growth and withdrawals. The RRSP offers a tax deduction on contributions, with taxation upon withdrawal. The non-registered account offers neither of these advantages, but compensates with unlimited flexibility and favourable tax treatment of capital gains and dividends.
Everything you need to know about unregistered accounts
It is an investment account without specific tax advantages (unlike a TFSA or RRSP), but without any contribution limits or restrictions on withdrawals.
No, there is no limit. You can invest as much as you like, making it an ideal complement to registered accounts.
The first $250,000 of annual capital gains are included at 50% in taxable income. Beyond that, the inclusion rate increases to 66,67%.
Dividends from Canadian companies benefit from the dividend tax credit, which significantly reduces the effective tax compared to interest income.
Yes, withdrawals are possible at any time without penalty. However, selling investments may trigger a capital gain or loss.
Yes, capital losses can offset capital gains in the current year, be carried forward to the previous 3 years or indefinitely to future years.
You can hold stocks, bonds, mutual funds, segregated funds, GICs, ETFs and other financial instruments — without any restrictions.
Generally yes — registered accounts offer greater tax advantages. A non-registered account is ideal as a supplement once those limits are reached.
Put your interest income (GICs, bonds) into your registered accounts. Reserve your non-registered account for stocks and funds that generate capital gains and dividends.
Account opening is free. As with any investment account, management fees may apply depending on the products chosen. Contact us for details.
Yes, like any investment, its value can fluctuate. However, losses incurred can be used to reduce taxes on your future capital gains.
The adjusted cost base (ACB) is the average cost of your investments, including reinvestments of distributions. It is used to calculate the capital gain or loss upon sale. It is important to track it for your income tax return.
Grow your wealth without limits
Whether you have maximized your registered accounts or are looking to diversify your portfolioOur advisors can help you structure your investments for optimal tax efficiency.
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