Despite continuing market and global uncertainty, the 2012 investment season is showing strong growth in RRSPs and TFSAs, as well as renewed growth of non-registered investments, according to a review by Royal Bank of Canada (TSX:RY).
RBC has seen investment growth double year-over-year and has surpassed one million pre-authorized contributions for investment accounts.
“In an uncertain economy, our clients have made more diversified investing a priority,” said Michael Walker, vice-president and head, branch investments, RBC. “What’s interesting is their move from one specific investment type like mutual funds to a diversified investment mix across longer term mutual funds, GICs and investment savings.”
While Canadian investors continue to choose longer term mutual funds, guaranteed investment certificates (GICs) were also popular. This renewed focus on guaranteed investments is likely due to a combination of factors: global uncertainty, the desire for higher yields available in longer term GICs and interest rates remaining unchanged for the near term, explains Walker.
More and more, the traditional two-month RRSP season has been expanding into the longer winter investment season, with a broader focus on the overall importance of RRSPs, TFSAs and non-registered investing. “We’ve seen many clients going back to the basics, recognizing that investing and saving is not just for what traditionally has been thought of as RRSP season, with good growth in regular contributions throughout the year,” say Walker.
According RBC poll, regular RRSP contribution plans gained in popularity among Canadian RRSP holders (35%), with almost half (48%) of younger RRSP owners (age 18-34) using regular contribution plans.
The survey was conducted by Ipsos Reid between Oct. 24 and Nov. 15, 2011 via a random sample of 1,224 adults in the general population.