What is Non-Registered Account?

Example

Suppose your TFSA and RRSP are maxed out. You open a non-registered account and buy VFV.TO. In this account:

• Foreign dividends are taxed at your marginal rate
• Canadian dividends benefit from the dividend tax credit
• Capital gains are taxed at the 50% inclusion rate when you sell
• Capital losses can offset capital gains

To optimize taxes, you generally place bonds in the RRSP, and Canadian dividend stocks in the non-registered account.

Why It Matters

If you have maxed out your registered accounts (TFSA, RRSP, FHSA, RESP), a non-registered account is the next step to keep investing. You need to understand the tax implications: track your ACB, report income on your T3/T5, and optimize asset location across your different accounts.