04-22-2015, 09:29 AM
I've suggested many times that beginner investors, or investing for kids, should consider using DRIP's. However, drip's cannot be used for TFSA or RRSP's here in Canada.
But one can still take advantage of using drip's to invest with small amounts, commission free purchasing of more shares, full dividend reinvestment and get the most from compounding.
Then when your drip becomes large enough you can transfer "In Kind" some of the shares into a tfsa or rrsp to get the tax advantage. This is especially good for kids, as they can't open an rrsp or tfsa till they are 18.
But one can still take advantage of using drip's to invest with small amounts, commission free purchasing of more shares, full dividend reinvestment and get the most from compounding.
Then when your drip becomes large enough you can transfer "In Kind" some of the shares into a tfsa or rrsp to get the tax advantage. This is especially good for kids, as they can't open an rrsp or tfsa till they are 18.