TORONTO – When it comes to money, everybody has questions! So this month on Building Better With Brandon, you asked, and we answered! Brandon and Faith Biyapo of TD Bank Group dug into all your questions, including what different accounts are available for those looking to save money, the different supports available for different communities, the benefits of working with a financial advisor, and more!
November is Financial Literacy Month in Canada, something very important to Biyapo.
“Financial literacy is a very important concept. A lot of people just take it at face value, but it’s something that needs to be internalized,” Faith explained.
“Just like a lot of the skills that we learn in school, this month takes this particular topic and puts it front and centre of every person, in every household,” Biyapo explained.
Question: Are There Different Types of Savings Accounts?
The short is answer: yes! There are several different types of savings accounts available for those looking to store their money away.
For example, TD has the following savings accounts:
TD ePremium Savings Account
TD Every Day Savings Account
TD High Interest Savings Account
Faith explained that the differences between these accounts include factors like interest rates, minimum balances, and the amount of free monthly transactions you are allowed.
“The major driver of the interest rates actually is the minimum balance,” Faith explained, adding that some high-yielding savings accounts have a minimum balance that you are required to keep in your account.
Question: Why Should I Work with a Financial Advisor?
Biyapo shared that when you’re looking to save, invest, or just learn more about banking, it’s important to work with a financial advisor.
“These people will help you set out a plan for your financial goals, whatever it is that you plan to achieve and they will work with you on this plan even as this plan evolves,” Biyapo explained.
These financial experts can also help with questions about savings, school, retirement, mortgages, and more.
“Instead of you trying to Google and find this information online, you can walk into a branch, any of our branches, and meet with a financial planner or a financial advisor and they can help you and give you expert advice,” he continued.
“We also provide specialty services to the different segments of the community,” Biyapo explained, sharing that some of these programs include one developed for marginalized groups like Black, 2SLGBTQ+, and Indigenous communities.
Question: What’s the Difference Between an RRSP and a TFSA
A Tax-Free Savings Account is a registered tax-advantaged savings account that can help you earn money, tax-free.
“The Tax-Free Savings Account basically is an account that allows people to save their money without paying any capital gains tax from the gains they make while investing through that account,” Biyapo explained.
Meanwhile, an RRSP is a savings plan that is registered with the Canadian federal government that you can contribute to for retirement purposes.
“While the RRSP, which is the Registered Retirement Savings Plan, is a program that allows people to be able to save for their retirement,” Biyapo continued, explaining that if you access the funds on the RRSP before a specific period of time you will be heavily taxed. You can only access this to go back to school or to purchase your first home.
But there are lots of other things you need to consider with either account, like your contribution limits, beneficiaries, and more, Faith explained.
Brandon and Faith answer all of your burning questions about financial literacy, and explain concepts like the difference between book value and market value on this episode of Building Better With Brandon! Let us know in the comments, did you learn something new?