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Exploring Luminus Financial’s Investment Options

Investing is not just about putting money away for a rainy day; it’s about strategically planning for your future. Whether you’re a seasoned investor or just starting out, Luminus Financial offers a range of investment options tailored to meet your financial goals and risk tolerance.  

In this blog post, we will explore some of our most popular investment vehicles and provide some details on their features. Let’s first start with a top-down review of the various investment and savings programs we offer at Luminus:  

1. Term Deposits: These offer a fixed interest rate over a specified term, with a guaranteed return and predictable growth. We have different term deposits available, such as Short-Term Deposits, and Long-Term Deposits, catering to different investment timelines and goals.  

2. Registered Retirement Savings Plan (RRSP): This plan is designed to help Canadians save for retirement while also maximizing tax savings. Contributions to your RRSP reduce your taxable income, potentially leading to a lower tax bill. Moreover, the investments grow tax-deferred until retirement, when you’re likely to be in a lower tax bracket. RRSPs offer a wide range of investment options, including stocks, bonds, mutual funds, and GICs. Luminus Financial also provides RRSP loans to help members maximize their RRSP contributions.  

3. Tax-Free Savings Account (TFSA): A TFSA allows you to contribute post-tax income while earning interest tax free, and then withdraw it tax-free at any time, which can be particularly useful for short-term financial goals or emergency savings.  

4. Registered Retirement Income Fund (RRIF): Once in retirement, RRSPs must be converted to RRIFs, which continue to allow your savings to grow tax-deferred while you withdraw a steady income.  

5. Investment Shares: By purchasing Luminus Investment Shares, members can enjoy annual dividends while contributing to the credit union’s capital, thereby supporting financial stability and growth initiatives.

6. Savings Accounts: Luminus Financial offers accounts such as the Classic Savings Account for a simple, interest-accruing savings option, and the Infinite Savings Account, which offers higher interest rates and the flexibility to withdraw funds at any time, penalty-free.
Now that you have an overview of our most popular investment products, let’s take a deeper dive into how you can use RRSP funds to invest in various types of financial instruments, including stocks, bonds, mutual funds, and Guaranteed Investment Certificates (GICs). Here’s how each investment works within an RRSP:  

1. Stocks: Investing in stocks through an RRSP means buying shares of individual companies. This is considered a higher-risk investment because the value of stocks can fluctuate significantly based on market conditions and company performance. However, they also offer the potential for higher returns compared to other investment types. When you invest in stocks within an RRSP, any dividends received or capital gains realized are not taxed until you withdraw the funds from the RRSP.  
2. Bonds: Bonds are essentially loans to a government or corporation who then pay back the principal with interest over a set period. They are generally a lower-risk investment compared to stocks. Within an RRSP, the interest earned from bonds is tax-deferred until withdrawal, similar to other investments within the account.  

3. Mutual Funds: Mutual funds are investment vehicles that pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. They are managed by professional fund managers and provide an easy way to diversify an investment portfolio. Within an RRSP, any income generated from mutual funds, such as dividends or interest, as well as any capital gains, are tax-deferred.  

4. GICs: GICs are low-risk investments that offer a guaranteed rate of return over a fixed period. The investor agrees to deposit their money to a financial institution for a set term, and in return, the financial institution guarantees the repayment of the principal investment plus interest. Within an RRSP, the interest earned on a GIC is tax-deferred until it is withdrawn from the plan.  

It’s important to note that while the investments grow tax-free within the RRSP, withdrawals are taxed as income at your marginal tax rate at the time of withdrawal. This is typically done during retirement when your income, and presumably your tax rate, may be lower than during your working years.  

When choosing the right investment strategy, consider factors such as your financial goals, risk tolerance, and investment horizon. Luminus Financial provides personalized advice through consultations to help select the best investment products to suit individual needs and objectives. Additionally, our website offers tools such as retirement and savings calculators to assist you with planning your financial future.  

For those interested in maximizing their membership, Luminus offers the MOR Rewards Program, which provides access to special rates and discounts across various financial products.  

Remember that the details of each investment option, including interest rates and terms, can be subject to change, and it’s always best to review the most current information directly from Luminus Financial or speak to a financial advisor for personalized advice.

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