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Should you get that promo rate? Check out the fine print first
– moneysense.ca
Some banks entice Canadians to open new accounts with the offer of a high but short-lived promotional interest rate. A generous interest rate might catch your eye, but there are a few things you should ask yourself before you sign up for a new chequing or savings account.
Should you switch bank accounts for a promo offer?
Not everybody loves promo rates. In fact, a recent EQ Bank survey showed that more than half of Canadians (57%) prefer banks that give all customers the chance to earn a higher interest rate for their loyalty or engagement, with another quarter (25%) preferring banks that offer the same rate to all customers. Only a very small proportion (5%) prefer banks that offer promotions exclusive to a few customers even when it means they may not be included.
That said, if you’ve caught a banking ad promising an extraordinary interest rate, it’s natural to feel tempted, but there are a few pitfalls to be aware of. Often, to get that high rate, you must meet certain conditions—and after a certain time period, your rate reverts down to a less favourable one…
How to plan for taxes in retirement in Canada
– moneysense.ca
When I retire and start to take an income, I would like to make sure the withholding tax is sufficient to cover what I would owe, when all my sources of income are considered.
In my case I will have CPP, OAS, a small pension, RRSP/RRIF income.
For each of these sources can I elect to set a minimum withholding tax rate to try and cover my tax obligations for the year so I do not end up owing?
—Ken
What to know about withholding tax in retirement
When you are a salaried employee during your working years, you have payroll tax withheld at source by your employer. If you have no other sources of income or deductions, you should have no tax owing at year-end. Since most people have deductions like registered retirement savings plan (RRSP) contributions and tax credits like medical expenses, most taxpayers end up with refunds in April.
Retirement works differently. Some sources of income have no tax withheld. And if you have income from a variety of sources, the withholding tax rate tends to be too low…
