Yes, it’s November. But this month is almost over, and the next has quite a lot going on. The holiday season is upon us, but that can mean many Canadians forget about the benefits and credits they were hoping to take advantage of. That is why now is the time.
In fact, there are quite a few benefits, credits, and grants that have a due date coming up of Dec. 31, 2023. Let’s look at some of the most popular ones you should get into before it’s too late!
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Savings plans
There are four savings plans that have a contribution deadline of Dec. 31. First off, however, let’s be clear. The Tax-Free Savings Account (TFSA) is the first that technically has a deadline of Dec. 31. However, that’s only if you’re reaching your contribution limit. There will be more contribution room added for the new year in this case.
However, the Registered Retirement Savings Plan (RRSP) also has a deadline. While the contribution deadline is actually Feb. 29, 2024, for the 2023 tax year, it’s different if you’re turning 71. On Dec. 31 of the year, you turn 71, this is the very last day you can contribute to your own RRSP. So, make sure you do it!
There’s also this year’s brand-new First Home Savings Account (FHSA) that has a deadline of Dec. 31. This account was created Apr. 1, 2023. However, the maximum participation period starting with when you open your first FHSA, and ending Dec. 31 is based on one of the following: either the 15th anniversary of opening your first FHSA, when you turn 71, or the year after making your first qualifying withdrawal.
Finally, if you have a Registered Disability Savings Plan (RDSP), the deadline for opening an RDSP, making contributions, and applying for matching grants and income-tested bonds for this year is also Dec. 31. Again, make sure to contribute wherever it applies!
Students
Students and the parents that fund these options also have a few deadlines on Dec. 31. For parents, the deadline for contributing to the Registered Education Savings Plan (RESP) is Dec. 31. And that’s huge, as for every dollar you contribute, the government will contribute 20%! This is up to $2,500 per year. Miss that deadline, and you’ve missed out on free cash for the year! This comes through the Canada Education Savings Grant.
But if you’re a student now looking for cash, there are options for you as well. Dec. 31 marks the deadline if you wish to apply for the Canada Student Grant for full-time or part-time students. You could be eligible for the grant if you have a financial need, are attending a qualifying program at a designated school, and your total family income is less than $66,942 as a single person. In that case, you could have a maximum grant of $35,429!
Claim and invest!
Now part of these savings plans is actually putting that cash to use. If you’re looking to save for a home, education, your children, or anything then you want to turn those investments into more money!
I would therefore consider exchange-traded funds (ETFs) that are managed by major institutions. This would include some of the major banks. For instance, BMO CA High Dividend Covered Call ETF (TSX: ZWC) is a great option. It holds a whopping 8.03% dividend yield as of writing, with shares down just 4% in the last year. You should see strong returns after the market recovers and not worry about having to manage a portfolio yourself. Instead, a management team does it for you.
By taking this approach, you can invest in multiple savings accounts listed here! You can then use ETFs to help fund those accounts with the help of your financial advisor. So, don’t miss out on a dime of the money you can earn!
