Non-registered or Open Investment Account

A Non-Registered, Cash, or Open Investment Account is generally used when you’ve maximized your contribution room in both your TFSA and RRSP, as a corporate investment account, or when borrowing money to invest. If you’re borrowing funds for investment purposes, placing them in a non-registered account is advisable, as it allows you to deduct the interest on the loan.

Unlike registered accounts, non-registered accounts offer no tax advantages and have no contribution limits. Any investment income earned, such as interest, dividends, or capital gains, is taxable as it is received or realized. 

These accounts are particularly appealing for corporate use, as they allow businesses to invest in a diverse range of investments, ensuring that corporate funds are not merely sitting idle in low or no-interest bank accounts.

Non-registered accounts are often set up for minors who wish to invest money from a job, gift, or inheritance. Since minors cannot legally own investment accounts in Canada, these are typically established as trust accounts, with parents or grandparents managing them on the minor’s behalf. When the minor reaches adulthood, the account is transferred into their ownership.