Yes, investments on Equivesto can be made eligible to be held in a TFSA (Tax Free Savings Account) or RRSP (Registered Retirement Savings Plan). However, its not as simple as just choosing an account and clicking go.
Making a private investment eligible for TFSA/RRSP investing requires working with a separate registered trust company, which has additional fees for the company raising money, and an additional ongoing account fee for investors.
Currently Equivesto works with Western Pacific Trust Company to offer this service.
Want to understand the details? Read Below:
Only certain types of investments are eligible to be used in a TFSA or RRSP. Typically, those are public investment products like stocks, bonds, and mutual funds.
For a private investment on Equivesto to be eligible to be used in an TFSA or RRSP, the company itself must choose to become TFSA and RRSP eligible. This takes some additional time, paperwork, and costs, and is done by a registered trust company that Equivesto partners with. This step is done before the company launches their campaign, and their campaign page will clearly indicate if it is eligible for TFSA and RRSP investments.
This process is so the Trust company can prove that the investors investing the campaign are not related to the company, but regular third party investors, who are investing without insider knowledge.
So a company campaign says it is TFSA and RRSP Eligible, what happens next? After completing your investment like normal, reach out to Equivesto directly by emailing alexander.morsink@equivesto.com and letting us know that you would like to hold your investment in a TFSA or RRSP. Equivesto will then connect you to our partner registered trust company, where you will have to set up a new TFSA or RRSP account to hold your investment.
Setting up a TFSA or RRSP with this company to hold your investment will have both a one time setup cost for you, as well as an annual account cost. The trust company with then hold your investment in your new account, and any additional TFSA or RRSP eligible investments you make via Equivesto can be held in that same account.
For this reason, setting up a TFSA or RRSP for private investments is not advised by Equivesto unless your investments are large enough that you are willing to pay the ongoing fees.