Chequing account

Most people use a chequing account as their main account for day-to-day banking. You’ll use this account to deposit your earnings, withdraw cash, pay bills or make debit card purchases.

Savings account

This type of bank account is designed for saving money that you don't plan to spend right away. The bank pays you compounding interest just for keeping funds in your account.

GIC (Guaranteed Investment Certificate)

A GIC is a low-risk investment that offers a guaranteed rate of return over a specific period of time. This makes it easy to figure out how much money you’ll have when your term is up. Generally, the longer the term, the better the interest rate.

TFSA (Tax-Free Savings Account)

A TFSA is a registered account. The income you earn on the funds or investments inside the account are completely tax free. Because you’ve already paid tax on any funds you put into the TFSA, any interest or returns earned are not taxed. You won’t need to pay income tax upon withdrawal either. This makes it a great option if you expect your income to increase in the future, as it allows you to save and grow your money without worrying about higher taxes later on.

RRSP (Registered Retirement Savings Plan)

An RRSP is a tax-advantaged savings program for retirement. When you add to it, you can reduce your taxable income. You can even set up automatic RRSP deposits from your paycheque before your money is taxed. You don't pay taxes on the money you put into an RRSP until you take it out, so it's better to withdraw from it in retirement when your income (and taxes) are typically lower.

FHSA (First Home Savings Account)

A FHSA is a registered plan that helps first-time home buyers save for their down payment. Contributions are tax deductible, your savings grow tax free and when you withdraw the funds to buy your first home, you won't pay any taxes on them.

PAC (Pre-Authorized Contribution)

A PAC is a recurring automatic contribution. It transfers a pre-specified amount of money from your bank account to a savings plan, like an RRSP, TFSA or FHSA. You can schedule PACs to occur on any interval you choose, such as weekly, bi-weekly or monthly. You can also specify the amount you’d like to be transferred each time.

Credit card

A credit card allows you to make purchases in store or online, enabling you to spend funds up to your credit limit. As a cardholder, you must repay the borrowed amount by a predetermined date. Any outstanding balance will incur interest charges, but if you pay the full balance on time you will not be charged interest. If you pay your credit card balance each month, your credit score will soon climb.

Loan

A loan is a set amount of money that you borrow and are obligated to pay back by a specific date, including interest. You pay the loan back at a fixed or variable interest rate, with a predetermined set payment. On average, banks offer loans over a span of five years.

Line of credit (LOC)

A personal line of credit is a revolving loan that allows you to borrow funds up to a predetermined limit. That means you can pull funds from it whenever you want and repay the principal at any time. You only pay interest on the money you borrow. A LOC is a lower-cost borrowing option than a credit card because the interest rate is lower and has more flexibility than a loan.