Do I use a TFSA or RRSP for investing in ETFs and Index funds?
Asked 3 years ago
I think passive investing might suit my needs right now while I work on finishing university (1 month out) and then going back to school as the pandemic has altered the profession I was about to join. I don’t want to worry too much about what each stock does or get caught up in short-term buy/sell - a set it and forget it approach appeals to me. Currently, I'm looking into ETFs with dividends and how to buy Index Funds on WealthSimple Trade. However, I'm not sure if it’s more advantageous to go through using a TFSA or RRSP. I'm not too keen on mutual funds. Seeking some advice and applicable literature to read?
Andrew Moran
Friday, October 22, 2021
If you are a passive investor, ETFs are the way to go.
Since you are possibly investing a small amount of capital, you are better off utilizing a TFSA at the moment. An RRSP is beneficial for larger sums since this retirement vehicle is a tax deferral.
That said, for ETFs with dividends, here are my top picks, which are traded on WealthSimple:
BMO Canadian Dividend ETF (ZDV)
- 06/16: $19.02
- Yield: $0.065 a share (monthly)
iShares S&P TSX Composite High Dividend Index ETF Units (XEI)
- 06/16: $24.37
- Yield: $0.076 a share (monthly)
Vanguard S&P 500 Index ETF (VFV)
- 06/16: $92.10
- Yield: $0.269 a share (as of March 26, 2021)
iShares S&P/TSX 60 Index ETF (XIU)
- 06/16: $30.57
- Yield: $0.197 per share (quarterly)
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