Investment glossary
Commonly used terms to grow your investment know-how.
Bond
Debt instruments that allow governments and corporations to borrow money from investors, rather than a financial institution. Bonds are generally less volatile than stocks but offer more modest returns.
Canada Disability Savings Grant (CDSG)
A matching grant that is added to a Registered Disability Savings Plan (RDSP) and is paid up until December 31 of the year you turn 49.
Canada Learning Bond (CLB)
A grant that the federal government adds to a Registered Education Savings Plan (RESP) for children from low-income families. A $500 Canada Learning Bond (CLB) is provided for children of families who are entitled to the National Child Benefit supplement and who are born after December 31, 2003. They are also entitled to receive subsequent grants of $100 per year of eligibility.
Canadian Disability Savings Bond (CDSB)
A grant that the federal government adds to a Registered Disability Savings Plan (RDSP) for low- and modest-income individuals.
Canadian Education Savings Grant (CESG)
A grant that the federal government adds to a Registered Education Savings Plan (RESP). The government will add 20% annually to the first $2,500 contributed to an RESP or $500 per year (subject to annual and lifetime CESG maximums).
Capital gain
Profit from the sale of a property or investment that has increased in value.
Contribution room
he amount you are able to contribute to a registered investment, such as a Tax-Free Savings account. Some accounts have both annual and cumulative contribution limits.
Deposit guarantee
At SCU, all deposits are guaranteed 100% by the Deposit Guarantee Corporation of Manitoba. This means your deposits are protected, in case your financial institution fails.
Deposit Guarantee Corporation of Manitoba (DGCM)
An organization that provides a 100% guarantee on all deposits held at a Manitoba credit union.
Dividend
Profit a company pays to its shareholders. Dividends can be paid as cash, or a form of reinvestment such as stocks or mutual funds.
Guaranteed Investment Certificate (GIC)
A low-risk investment that guarantees the return of your initial investment.
Interest income
Earnings generated by your investments.
Mutual funds
A type of investment where multiple investors pool money to purchase securities like stocks, bonds, and other money market instruments.
Registered Disability Savings Plan (RDSP)
A government program designed to help Canadian residents under the age of 60 who are living with disabilities save for future financial needs.
Registered Education Savings Plan (RESP)
A specialized account sponsored by the Canadian government to encourage saving for a child’s future post-secondary education.
Registered Retirement Income Fund (RRIF)
A plan that converts your RRSP savings into income after retirement. Instead of cashing in all your RRSP savings at once (and paying income tax on the total amount), a RRIF allows you to make withdrawals as you need them and lets the rest of your money continue to grow, tax-sheltered.
Registered Retirement Savings Plan (RRSP)
An account specifically designed to help income-earning Canadians under the age of 71 save for retirement. An RRSP holds other types of investments such as GICs, mutual funds,* and stocks.* RRSPs allow you to reduce your taxable income now through tax-deductible contributions and defer paying taxes on your investment earnings until after retirement when you are typically earning less income and are likely in a lower tax bracket.
Risk tolerance
The level of risk an investor is willing to take.
S&P/TSX 60 Index
A stock market index of 60 companies listed on the Toronto Stock Exchange.
Securities
Any financial investment that can traded.
Stock
A share of ownership in a company. Stocks have historically had higher risk, but higher long-term returns than bonds or cash-based investments.
Tax-Free Savings Account (TFSA)
A TFSA is a flexible, general-purpose savings vehicle that allows you to earn tax-free investment income and more easily meet your lifetime savings needs.
Tiered interest rate
Interest rates that increase the more you put into the account. At SCU, we offer higher interest rates based on certain balance thresholds.
* Includes all savings and chequing accounts, RRSPs, RRIFs, TFSAs, and GICs.