Personal Finance Insights

No Room Left in Your RRSP or TFSA? No Problem!

So, you’ve maxed out your registered retirement savings plan (RRSP) and tax-free savings account (TFSA). Maybe you’re a diligent saver or have just sold your home or business. Maybe you’ve inherited money or received some other financial windfall. Whatever the reason, you’ve got additional cash to invest.

Sure, it may seem like a nice problem to have, but you still need to address it. How can you keep growing your wealth for the future? There are a few different options. Common ones that might come to mind are a Guaranteed Investment Certificate (GIC) or a high interest savings account (HISA). But if you’re looking to maximize growth for the long term, a non-registered investment account could be your best bet.

Let’s compare these three options, looking at the growth opportunities and tax implications of each, to help you decide how to grow your money most effectively.

Earn more with non-registered investments

Any investment that generates positive returns will bring you closer to your financial goals. While GICs and HISAs do generate small guaranteed returns, historically you’re much better off generating growth in an investment account than letting it sit in a slow-to-grow savings account over the long term.

The chart1 below compares the growth and performance of a non-registered investment, GIC and HISA over an extended time period. You can see that the non-registered investment account comes out significantly ahead. This remains true even when you factor in capital gains, which we’ll look at below.

How is the income on these accounts taxed?

The most common types of investment income include dividends, interest and capital gains. And, while the income earned from investments held in non-registered accounts is subject to tax, not all forms of investment income are taxed the same way. Some investment income attracts less tax than others.

Investment income from HISAs and GICs is considered interest, and the taxes owed are based on you marginal tax rate (which varies by income and province). This is noteworthy because this type of tax is the most expensive.

Non-registered investments can earn a blend of different types of income as a result of what’s held in the account (most commonly dividend income and capital gains). This is an advantage because the gains earned are taxed at different rates, creating an opportunity to reduce the taxes paid on the income earned.

Here’s what those different tax rates look like in Ontario:

Type of Investment Income

Tax Rate*





Capital gains


Now, let’s look at an example of how those tax rates impact returns.

Example: saving $10,000 for 1 year

Pete has run out of contribution room in his TFSA and RRSP accounts, and is looking to keep growing his savings. Pete needs to know which account option will earn him more, after accounting for tax. 

Because he lives in Ontario with an annual income of $65,000, Pete pays taxes on the investment income at the rates listed in the chart above.

Here’s what happens when Pete invests $10,000 into each of the three account types:

Non-registered investment

High interest savings account


Amount invested





$600 (4% from dividends & 2% from capital gains)

$300 (3% from interest)

$400 (4% from interest)

Principal plus return




Taxes owning




Investment total, after tax




In this example, a non-registered account provides the best after-tax return.

When should I use a HISA or GIC?

Good question. HISAs and GICs should be considered when you absolutely can’t afford to lose money in the short term (e.g., if you’re making a down payment on a house in the coming weeks or months).

While investments typically perform better in the long term, there is no such thing as a guaranteed return. If markets dip while you’re invested, you might want to wait it out until your investment recovers.

By contrast, the return on a GIC is guaranteed. And, while returns on HISAs may change occasionally based on the current rate your financial institution has set, they aren’t subject to market volatility and therefore remain pretty consistent. If you’re sure you need the money soon, a HISA may be a great way to park your money while still earning interest that’s higher than the standard savings rate.

Not sure which option is right for you? We’ve broken down when to use a savings account and when to use an investment account, here.

FHSA: A new option to consider

Introduced in the 2022 Federal Budget and rolled out in 2023, the First Home Savings Account (FHSA) is a registered account that helps first-time homebuyers save faster for a down payment. You may allocate up to $40,000 (maximum $8,000 per year), on a tax-free basis, toward a down payment.

Investing your FHSA contributions may help grow wealth and amass a larger down payment. When it’s time to withdraw the FHSA funds and purchase your first home, neither the principal amount nor any growth you’ve achieved in the FHSA is subject to taxation.

Learn more about the FHSA and eligibility requirements. This account may provide another way for prospective first-time homebuyers to build wealth if you’ve already maximized your RRSP and TFSA.

Keep growing your money

Ready to keep growing your money? CI Direct Investing offers professionally managed, non-registered investment accounts.

Any time you’re using non-registered investments as part of your retirement strategy, it’s always a good idea to work with an adviser.

CI Direct Investing’s team of professional financial advisers will work with you to optimize your investments. We’ll show you your options and guide you toward choices that make sense, given your stage of life and financial goals.

Book a call to speak to one of our advisers today.



This blog post may make financial planning assumptions such as rate of return, inflation, and/or tax rates to illustrate a concept. It is provided for informational purposes only and is not to be considered as investment advice. Investment returns are not guaranteed. The value of your investment may go down as well as up. There may be significant differences between the investments that are not discussed here, including different investment objectives and risk factors.

Although CI Direct Investing believes the obtained information provided from third-party sources to be reliable, CI Direct Investing does not guarantee the information and disclaims any liability associated with the use of these performance results. For full details of calculation please contact:

Above is an illustration of hypothetical performance of a non-registered investment, GIC and HISA over 30 years with constant 6%, 4% and 3% annual growth, respectively. It does not take into account any fees that may be charged.

* Tax rate calculations based on applicable marginal tax rates in Ontario for 2023, assuming $65,000 gross annual income.