Newbie investor here... I just read Investing for Dummies for Canadians. I skimmed through it pretty fast but feel I got all I could out of it, though I'll probably refer back to it later.
A year ago I opened a TFSA and an RRSP with CIBC. At that time, I didn't know that a RRSP could hold different types of investments, I thought all RRSPs were the same. Anyways my RRSP holds a DISA which earns me the impressive interest rate of one tenth of one percent per year. Needless to say I can't save for my retirement with such a dismal return rate. What kind of interest should I be aiming for? In order to get a decent interest rate out of my RRSP, do I have to transfer it out of CIBC to some other type of institution, or can I keep it with CIBC? For example, can I just go to CIBC and tell them to put mutual funds in my RRSP instead of the DISA, and voila I have a much higher return rate? Or is it more complicated than that? What about my TFSA, what kind of investments should I be holding in it? The authors of Investing for Dummies seemed to strongly suggest not using a brick-and-mortar bank like CIBC because they always pay less interest, but then why do so many people use such banks for their RRSPs? I'm not sure what kind of interest I'm getting with my TFSA, but it's slightly higher than my RRSP.
My RRSP is to be used as a retirement fund, I am 27 now so I can take some risk, though I may withdraw some money in a few years under the homebuyer's plan, but that's not a certainty and if I do I will repay it back as quickly as I can. Should my RRSP be self-directed or bank managed? I am leaning toward the latter because I don't think I possess the necessary skill to manage it on my own. I don't want to have to actively pick investments or anything like that, I want the bank to do that for me automatically and all I have to do is visit them once in a while and tell them how much money to transfer from my chequing account into my RRSP.
I also have a Bonus Savings account, which earns 0.75% interest. It was 2.25% when I opened it but then they reduced the rate. Should I close this account? I don't see the point of having both it and the TFSA/RRSP, especially considering I am not maxing out the RRSP or TFSA.