The “Big Five” Canadian banks offer investment funds and include Royal Bank of Canada, Toronto Dominion Bank (TD Canada Trust), Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce (CIBC). Let’s explore the best place for you to invest.
Latest News
The best banks in Canada + MORE Oct 16th
Most Canadians are aware of the Big Five banks: RBC, TD, Scotiabank, BMO and CIBC. And some may even know that occasionally National Bank of Canada sneaks in and expands that list to six. But even with these accounted for, there are dozens of banks in this country, each offering its own suite of per.... More »
Making sense of the markets this week: July 28, 2024 Jul 26th
Michael McCullough is a contributing editor to MoneySense and a financial writer and editor in Duncan, B.C.
Biden’s withdrawal soothes bond market, deflates “Trump trade”
Compared to the way U.S. President Joe Biden’s decision not to run for a second term shook the political world, the.... More »
Does a spouse’s real estate ownership cancel out first-time homebuyer qualifications? Jun 5th
Q. My husband and I married recently, and we have lived together in a rental apartment since we got engaged and married. He has a condo, which he purchased seven years ago, but he has not lived there for the past three years. I’ve never lived in that condo and he didn’t use the Home Buyers’ Pl.... More »
Making the most of the pension tax credit Nov 28th
Ask MoneySense
I liked your coverage of RRIF taxation. I would like to see more information on LIF taxation. More precisely, on the following scenario: Individuals do not get the $2,000 tax credit for RRIF withdrawals before age 65. Did I read properly that for LIF withdrawals the $2,000 tax cr.... More »
The Magnificent 7 versus the other 493 S&P 500 companies: What’s the better investment? + MORE Oct 1st
The tech sector, driven by some of the world’s largest companies—Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla, also known as the Magnificent 7—has fuelled the markets for about two years now. And this isn’t likely to change any time soon, even if those companies (and the sector.... More »
The pros and cons of a dividend reinvestment plan
– moneysense.ca
Q. What are the pros and cons of using a DRIP in an unregistered account?
–Doug
A. Many stocks and exchange-traded funds offer a Dividend Reinvestment Plan, or DRIP, for investors. A dividend reinvestment plan does just what its name suggests: It reinvests dividends paid by a mutual fund, stock or ETF into more shares or units of that same mutual fund, stock or ETF.
If you have an investment advisor, they can determine which securities are DRIP-eligible. RBC Direct Investing provides a list of Canadian and U.S. stocks and ETFs that are DRIP-eligible, and that should apply for most do-it-yourself investors at other brokerages as well. Mutual funds generally reinvest all distributions into new units as a matter of course.
There are pros and cons to dividend reinvestment plans, Doug, as you suggest. Here are the top three reasons to DRIP and not to DRIP.
Reinvestment helps your money grow
The magic of compounding is one of the definite pros of dividend reinvestment. If you own $100 worth of a stock that grows at 4% per year and pays a 2% dividend, and you reinvest your dividends, you will have $179 after 10 years…
–Doug
A. Many stocks and exchange-traded funds offer a Dividend Reinvestment Plan, or DRIP, for investors. A dividend reinvestment plan does just what its name suggests: It reinvests dividends paid by a mutual fund, stock or ETF into more shares or units of that same mutual fund, stock or ETF.
If you have an investment advisor, they can determine which securities are DRIP-eligible. RBC Direct Investing provides a list of Canadian and U.S. stocks and ETFs that are DRIP-eligible, and that should apply for most do-it-yourself investors at other brokerages as well. Mutual funds generally reinvest all distributions into new units as a matter of course.
There are pros and cons to dividend reinvestment plans, Doug, as you suggest. Here are the top three reasons to DRIP and not to DRIP.
Reinvestment helps your money grow
The magic of compounding is one of the definite pros of dividend reinvestment. If you own $100 worth of a stock that grows at 4% per year and pays a 2% dividend, and you reinvest your dividends, you will have $179 after 10 years…
