Tax planning become more important in these investments as the type of income they generate determines the tax rate they attract. Capital Gains, realized or unrealized, dividend or interest income. The type of investment growth an asset generates determines the tax consequence. Secondly, the tax is only due upon the actual or deemed disposition of the asset. While they are taxable annually it is at a favored rate .
Interest income is the least favorable investment income from a tax view-point.
It attracts tax annually at the full rate. 1 to 5 year CDIC guaranteed. They may be registered as RRSP or Open Accounts. There is a wide array of term options, both on a locked or unlocked basis. Terms of up to 10 years are available.