Registered Retirement Savings Pl (RRSP) and Tax-Free Savings Accounts (TFSA).
At the beginning of Feb. 2021, the Ontario Securities Commission made a historic decision and approved the first Bitcoin Exchange Traded Fund (ETF) in North America.
The Bitcoin ETF is a regulated financial vehicle just like any other. It provides direct exposure to bitcoin and allows for trading bitcoin on a regulated stock exchange, just as purchasing shares through banks and brokerage firms.
This historical adaptation of a Bitcoin Exchange-Traded fund has brought with it an array of opportunities. Not only is Bitcoin now accessible to investors who are not familiar with the cryptocurrency market, but it also enables the inclusion of such investments in tax-preferred accounts such as Registered Retirement Savings Pl (RRSP) and Tax-Free Savings Accounts (TFSA).
Registered Retirement Savings Pl (RRSP) is an initiative of the Canadian government that
manifested back in 1957 to assist Canadian Nationals in saving for retirement.
An RRSP is considered a tax-advantage account created to motivate Canadians to invest in their retirement by providing very comfortable terms, tax-wise.
In practice, what this means is that any funds contributed to the RRSP will be exempt from CRA taxes the year of the deposit. Tax will be collected years down the line when you retire and at the most comfortable rates. RRSP is the perfect option to cut down on taxes.
Your yearly income is $100,000, and you decide to allocate $20,000 into your RRSP. The CRA tax that year will calculate $80,000 instead of the actual payment of $100,000.
Tax-Free Savings Account (TFSA) was launched in 2009 and is another tool for adults to place funds aside tax-free throughout their life cycle. Amounts contributed and earned are, in most cases, tax-free even when withdrawn.
Three types of TFSAs are available:
An annuity Contract
Arrangement in Trust.
Insurance Firms, Credit Union, Trust Companies & Banks, can all issue TFSAs.
Non-Resident Canadians holding a valid Social Insurance Number (SIN) and are 18 years of age or older are also eligible to open a TFSA.
* Contributions made while holding a non-resident status will be subject to a 1% tax for each month.
TFSA contribution room is the maximum amount of funds one may allocate to his TFSA or, in other words, the yearly limit.
If you turned 18 after 2009, your TFSA contribution room starts in the year you turned 18, and your TFSA contribution room accumulates every year after that year.
Investment income earned by and changes in the value of your TFSA investments will not affect your TFSA contribution room for current or future years.
The annual TFSA dollar limit for the years 2009 to 2012 was $5,000.
The annual TFSA dollar limit for the years 2013 and 2014 was $5,500.
The annual TFSA dollar limit for the year 2015 was $10,000.
The annual TFSA dollar limit for the year 2016 to 2018 was $5,500.
The annual TFSA dollar limit for the years 2019 and 2020 is $6,000.
Bitcoin and other cryptocurrencies are not used by the traditional banking system and brokerage firms as acceptable currencies or investment vehicles. This means they cannot be included directly in both TFSA & RRSP accounts. However, investing in an ETF with exposure to Bitcoin can be included, and this serves as a grand opportunity.
The CFGlobal Trader Platform allows you to legally include cryptocurrency investments in both TFSA and RRSP accounts.
The CFGlobal Trader platform offers Canadian Nationals with such specific management services that provide bountiful tax benefits.
All you need to do is open a TFSA or RRSP trading account and purchase shares when the market opens.