Week 5 - December 2

BASIC BANKING AND INVESTMENTS

Once you turn 18, you have access to many ​banking features​. In this lesson, we
will briefly talk about some banking tools that are relevant.

First, we will begin by comparing a chequing account to a savings account:

Chequing Account Savings Account

● A banking account for day-to-day ● A banking account that is used for

spending (groceries, shopping,
restaurants, etc.)
● You can quickly deposit and withdraw
money to spend without high fees
● Can access funds through ATM machines
● You ​do not​ earn any type of interest on
the money in your chequing account, so
do not put your money in here for saving!
longer-term saving
● Earns interest over an extended amount
of time
● Put money that you do not immediately
need in here for ​safety
● Although putting money in a savings
account will earn you money back, the
interest late is usually very low (around
0.05%), so other investments are
arguably better but ​riskier

There two banking accounts will be very familiar soon! Make sure you understand what they are and
how to use them effectively. Next, I’ll quickly talk about two important “​financial vehicles​” that you can
access through banks that are important for us.

1. RESP (Registered Education Savings Plan)

The RESP is a government savings account used to fund your post secondary education. You can save
money with this account with very low taxation, and the government will even contribute 20% of the
total savings. If your parents have had an RESP opened for you since you were born, the government
could have potentially given up to​ ​$7,800​ for your university tuition! You can ask your parents if you
have one of these accounts.

2. TFSA (Tax Free Savings Account)

The TFSA is super important for Canadians looking to invest. Basically, you will be able to open this
through a brokerage (online or in person) and invest your money into investments like stocks without
having to pay taxes on your returns. Also, make sure to request for a self directed account.
Week 5 - December 2

3. Loans

When you're 18, you will be able to access loans for big payments like a car or a house. Banks have the
right to deny you loans if you have a poor credit score, so that’s why having important credit is
important. When you take a loan, you will be burdened with debt so make sure to borrow responsibly.

Investments
From the previous two lessons, we learned what the stock market was. However, the stock market is not
the only place where you can invest your money. Below is a list of other assets or commodities that
people invest in. In January, we will make sure to delve deeper into all of these investments.

● Bonds
● Cryptocurrency
● Real Estate
● Mutual Funds & ETF’s
● Gold, Silver, and other commodities
● Heduge Funds
● Options

Here is a scale that depicts the risk levels attached to types of investments.

(This figure prioritizes the

common investments of mutual
funds, stocks, and bonds, but
there are many more options)

References for image

- https://blog.vancity.com/intro-investing-stocks-bonds-mutual-funds/
- https://www.forbes.com/sites/ronshevlin/2020/07/06/bankings-delusions-of-digital-transforma
tion/