Market growth, with a floor
Segregated funds are insurance products managed by life insurance companies. They hold a portfolio of stocks, bonds, or both — similar to mutual funds in that sense — but they come with two guarantees mutual funds don't carry: a maturity guarantee that protects a portion of your principal over the long term, and a death benefit guarantee that ensures your beneficiaries receive at least the guaranteed amount regardless of what the market has done.
These guarantees have real value for investors who are close to drawing down their savings, who want to protect assets from creditors, or who want their estate settled quickly without going through probate.
Segregated funds vs. mutual funds
| Segregated Funds | Mutual Funds | |
|---|---|---|
| Principal protection | Guaranteed payout of 75 to 100% of principal at maturity | No guarantee — full market risk |
| Death benefit | Beneficiaries receive 100% of invested amount or market value, whichever is higher | Market value at time of death only |
| Estate settlement | Paid directly to named beneficiary, bypassing probate | Passes through the estate, subject to probate delays and fees |
| Creditor protection | Funds may be protected from creditors when a qualifying beneficiary is named | No creditor protection |
Non-registered investments
Once your RRSP and TFSA contribution room is fully used, non-registered accounts are the natural next step. These accounts are not registered with the government, which means there are no contribution limits and no restrictions on when or how you can withdraw.
Non-registered accounts are taxed differently depending on the type of income generated. Interest income is fully taxable, dividend income qualifies for the dividend tax credit, and capital gains are taxed at a more favourable rate. Structuring what you hold in registered versus non-registered accounts is part of a complete investment plan.
No contribution limits
Fully flexible — no restrictions on deposits or withdrawals
Can hold the same range of investments as registered accounts
Can be used alongside RRSPs and TFSAs as part of a broader strategy
Investment income can be structured to take advantage of favourable capital gains treatment
Service area
Jatinder Singh and his team serve clients across Ontario and Alberta. Appointments are available in person at 195 Queen St E, Brampton, or by phone.